💼Standard Chartered Bank establishes a physical presence in Luxembourg, entering the EU cryptocurrency custody sector
Standard Chartered Bank has recently set up a new entity in Luxembourg, specifically responsible for cryptocurrency custody services in the EU, marking a key step in their provision of custody services for crypto and digital assets to EU clients.
The initial focus of this entity will be on Bitcoin (BTC) and Ethereum (ETH), with plans to expand services to other assets later in 2025.
Why choose Luxembourg? The main reason is that Luxembourg's regulatory and financial environment is well-balanced, adequately meeting the needs of EU clients for Bitcoin custody services.
Before starting operations in Luxembourg, Standard Chartered Bank launched Bitcoin and Ethereum custody services in the United Arab Emirates (UAE) and collaborated with Brevan Howard Digital. These actions are part of its global strategy aimed at expanding digital asset products following the implementation of the MiCA regulation.
According to the MiCA regulation, cryptocurrency exchanges recognized as Crypto Asset Service Providers (CASP) must adhere to a very strict framework to operate in the EU. They must first obtain authorization from national regulatory authorities, meet financial stability benchmarks, and ensure operational transparency.
Simultaneously, these exchanges are required to implement robust consumer protection measures, including clear service terms, transparent fee disclosures, and strong security systems to safeguard user funds and data. They also need to maintain operational transparency by reporting trading volumes, disclosing conflicts of interest, and keeping detailed trading records.
Additionally, the anti-money laundering (AML) provisions of MiCA require exchanges to execute “know your customer (KYC)” processes and monitor suspicious transactions, retaining data to assist relevant authorities in investigations.
However, meeting these standards can be challenging, necessitating advanced compliance technology and significant resource investment. Smaller exchanges, in particular, face immense pressure in meeting financial stability requirements and navigating complex compliance infrastructures.
💬 What do you think of Standard Chartered Bank's move? Does it mean that cryptocurrency custody services will become increasingly regulated and widespread in the EU? Feel free to leave your thoughts in the comments section!
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