Major bank Standard Chartered announced fund manager 21Shares has selected it as its digital asset custodian, potentially moving away from a crypto-native partner.

According to a Monday announcement from Standard Chartered shared with Cointelegraph, the bank will provide crypto custody services to 21Shares, which offers multiple exchange-traded crypto products. Margaret Harwood-Jones, the bank’s global head of financing and securities services, said the collaboration allows them to “to extend our expertise into the fast-evolving digital asset ecosystem.”

However, 21Shares already had a crypto-native custody partner. In late June 2024, the fund manager partnered with crypto-native custodian Zodia Custody to hold its assets. Zodia Custody was co-founded by Standard Chartered in 2020 and operated as a wholly owned subsidiary, indicating that the bank wanted to avoid direct involvement in crypto at the time.

It is unclear whether Standard Chartered will take over Zodia Custody’s role or if the two organizations will operate alongside each other. It remains unclear whether Standard Chartered will replace Zodia Custody or operate alongside it. The move comes as more traditional financial institutions roll out crypto services, often with reputational advantages over crypto-native competitors.

Standard Chartered, 21Shares and Zodia Custody had not answered Cointelegraph’s request for comment by publication.

Related: BlackRock quietly accumulated 3% of all Bitcoin. Here’s what that means

Traditional finance takes on crypto

Standard Chartered said 21Shares will work with its newly established digital asset custody service based in Luxembourg. The announcement follows the bank’s mid-July launch of a trading service that allows institutions and corporations to trade major cryptocurrencies.

21Shares’ global head of product development, Mandy Chiu, said the collaboration is “an important milestone in our continued mission to bring institutional-grade infrastructure to the digital asset ecosystem.” She pointed to the bank’s reputation in traditional finance as an advantage.

“As one of the world’s most trusted financial institutions, Standard Chartered brings deep expertise in cross-border banking, risk management, and custody.“

Other major banks have taken similar steps. In September, US multinational financial services firm US Bancorp reentered the crypto space by relaunching its digital asset custody services aimed explicitly at investment managers. This follows the company’s launch of its custody service in 2021, which was subsequently shut down due to unfavorable regulations.

Mid-August reports also note that Wall Street giant Citigroup is weighing plans to offer cryptocurrency custody and payment services. In July, Germany’s biggest bank, Deutsche Bank, was also reported to be planning to allow its clients to store cryptocurrencies — amid a broader trend in the nation.

Related: US Federal agencies outline key risks for banks eyeing crypto custody

Crypto and traditional finance change together

That trend has stirred debate within the industry, as crypto-native institutions face intense competition.

In October, Martin Hiesboeck, head of blockchain and crypto research at crypto financial services platform Uphold, said that large Bitcoin (BTC) wallets moving their assets into ETFs is “another nail in the coffin of the original crypto spirit.”

The comment follows Robbie Mitchnick, BlackRock’s head of digital assets, saying that the company had already facilitated more than $3 billion worth of real Bitcoin to ETF conversions. He added that holders recognize “the convenience of being able to hold their exposure within their existing financial adviser or private-bank relationship.”