After becoming the first global systemic bank to offer cryptoasset trading to institutional investors, Standard Chartered has now announced a joint venture to issue stablecoins in Hong Kong. FStech news editor Alexandra Leonards speaks with Waqar Chaudry, head of digital assets, financing and securities services to discuss why digital assets are now central to the bank’s strategy, how the market is evolving, and what future interoperability between blockchain and traditional finance might look like.

The recent launch of Standard Chartered’s fully integrated digital asset trading service for institutional clients, alongside a joint venture to issue stable coins in Hong Kong, are the latest in a long line of new services and products the London-headquartered financial institution is rolling out in the cryptocurrency space.

The multinational bank is already offering digital asset custody and trading services through its corporate and investment bank, as well as tokenisation services.

Standard Chartered has shifted from experimentation to a strategy focused on developing repeatable digital asset services that meet real market demand.

“There is some innovation going on in our ventures team, which is excellent for us because we can take ideas, adapt them, and bring them into the bank,” Waqar Chaudry, head of digital assets, financing and securities services at the bank, tells FStech. “But generally speaking, the strategy is to make sure that the time for experimentation is over – we’re bringing things to production.”

A focus on collateral & custody

One area that Standard Chartered is currently focused on within its digital asset strategy is collateral.

“Managing collateral for clients, and enabling near 24/7 value transfers and settlements, is an exciting development,” says Chaudry. “It provides deep insight into our clients’ future needs, as many are discovering that these capabilities are not as easy to implement as they might seem.”

Standard Chartered can facilitate banking, tokenisation, custody and safe settlement, and the on-chain movement of assets, which the head of digital assets explains is becoming an important part of the ecosystem.

“We’re quite excited about pulling all that together and making these components scalable,” adds the head of digital assets.

Standard Chartered is currently offering digital asset services in Dubai and Luxembourg, with the bank in the process of getting a licence in Hong Kong. It has also begun early conversations with regulators in Singapore.

“In the Middle East and Africa region, we can easily say we are leading in the market,” he says. “In a way, we’re leading globally because of the things we are doing with custody, for a start, and then being able to connect our digital rails with traditional ones.

“So, delivering a combination of crypto custody and then being able to bring stablecoins into the system and connecting the dots with tokenised assets is something we’re very unique at as a bank – we think we are the most advanced bank in the world in this area.”

A challenging landscape

While the bank’s position in the global digital asset landscape becomes stronger with a growing portfolio of services and products, it faces a number of challenges on that journey, including resource limitations.

“We’ve got so much to do – it’s about identifying how to balance demand versus throughput,” says Chaudry, explaining that with the number of viable use cases mounting in the space, it can be tricky to keep up with demand.

Another crucial factor for the bank is maintaining strong relationships with regulators.

“Every time we venture into an activity within a new country, for example, we start looking at minting points or staking, we start looking at adding new points, and every time each country approaches it differently,” he says. “So, navigating that is not a challenge, but it is a significant task for the bank to undertake.”

The digital assets lead adds that, at the same time, regulation needs to keep up with the market.

“We’re seeing a lot of new frameworks being built or upgraded to cater to new activities,” he continues. “So, it’s a multi-pronged issue that we’re dealing with, where you’ve got internal, external and bilateral – not hurdles – but considerations to get through.”

Chaudry says the regulators have so far been “extremely positive” across the countries in which it is currently operating.

“What we’re doing is making sure that we fit in the right regulations,” he says. “But to be able to do that, you need to be able to talk to the regulators and discuss new ideas with them. So that’s where some of the time is being spent. It’s a two-way street.”

He continues: ‘If we propose something that does not align with the regulator’s perspective, we adjust accordingly. Similarly, if we spot a barrier to entry, we offer our feedback, which regulators often consider.”

Blockchain meets traditional finance

Chaudry talks about how the interoperability between blockchains and traditional finance systems could evolve over the next few years.

“It’s a difficult one,” he says. “Every bank is different. We are an emerging markets bank, so we’re on the edge of innovation at all times. In countries where there's no infrastructure, we build new infrastructure – so we're very used to fast-moving environments.”

Chaudry explains that the digital assets space echoes these environments to some extent.
“The asset class market is moving rapidly, so we’re used to the volatile nature of the markets in which we operate,” he says. “It’s in our DNA, so we can actually deal with it.”

He continues: “But what that that means is that when we deliver services to our clients, which include the combination of our traditional rails with the new digital rails, we still have to create bridges – in the sense of being able to pick up a piece of information from one system, transport it into another, absorb it into the blockchain, and from the blockchain pick it up back into the system. That’s happening today.”

Chaudry envisions a future where traditional rails – the established systems and processes used for moving money and assets in conventional banking – become obsolete.

“Everything will go into some form of a digital ledger,” he says. “It will happen but whether it happens in two, five or 10 years – who knows? But we’re building bridges as we go.”

Artificial intelligence

As the digital asset landscape expands, is there place for AI in the world of blockchain?
One thing Standard Chartered has been considering is how to actively monitor activity when it comes to digital assets.

“The kind of thing we need to make sure we have is something that monitors and actually keeps an eye on moving on-chain and transactions that are coming in and going out – like an AI agent – that way we are accounting for those assets,” says Chaudry. “AI plus blockchain connectivity, while there is no natural sync between the two, being able to use the automated nature of decision making or at least advising on activity is something that we definitely want to explore.”

This is something currently in the pipeline for Standard Chartered.

“For now, we plan to automate certain monitoring tasks to better inform our staff and procedures, both in traditional and digital systems,” he continues. “This is an exercise in augmentation, not a complete transition.”

“But again, blockchain and AI, they're two different worlds, we need to find a way to bring them together.”

Standard Chartered’s future plans

On the institutional banking side of the business, future plans include expanding the number of coins it offers to between 10 and 15 to meet demand.

“That’s a priority,” Chaudry tells FStech. “It’s also important for us to support all of our existing asset manager clients to get the services from the bank as well, such as asset safekeeping, tokenisation, collateral mobility, etcetera. So that’s something that’s certainly in the works.

“Then expanding from our traditional to digital so we are a significant player in the sub-custody market. We provide custody to our global custodian partners and clients, and we want to extend the same service to them globally. That’s the next stage of evolution of our service.”

The company is also focused on making sure what it delivers with digital assets matches its traditional services. For example, it is looking at how to facilitate for customers interested in trading with the bank the ability to take out a loan on the back of digital assets.

“I think the one thing that gets missed is the importance of a systemically important bank providing safety of assets,” he says. “It’s a huge point, because that does make or break a deal for a large corporate or an asset manager, or anyone for that matter who actually has either a fiduciary duty or a duty to safeguard the assets.”

He says that global systemically important banks are minded to operate in a certain way when it comes to managing risk, risk capital, regulations and duty of care.

“A lot of people have missed that bit because it’s all been about technology,” he says. “But now the governance and risk capital risk management or the capital that it takes to safeguard these assets is quite critical.”

He says that this should now become a top priority for banks.

“With assets reaching billions under exchange traded funds and being sent to exchanges, if they get misappropriated or misplaced, there are going to be systemic shocks,” continues Chaudry. “So, you need somewhere to cushion that.”

The road ahead

Speaking about his long-term vision for the role of digital assets in global finance, Chaudry says that the ideal scenario would be that nobody uses the term “digital asset” anymore.

“People need to stop talking about blockchain as the technology because it’s just another rail,” he tells FStech. “And people should stop talking about digital assets in a vacuum because they’re becoming part of the ecosystem.

“While this is not yet happening today, in the next few years what I do want to see is that, for our clients especially, they don’t see a difference when they receive a service from us whether using a traditional or digital asset.”

He sees a future where customers tapping into digital asset services will engage with the same user interface and experience as traditional ones.

“That’s the aim of the game,” concludes Chaudry.

Digital assets and blockchain technology are rapidly entering the mainstream, with a growing number of use cases being adopted by traditional banks. Lloyds Banking Group has announced a trial using tokenised assets as collateral for foreign exchange. Meanwhile, BBVA has introduced bitcoin and ether trading and custody services for retail customers in Spain, and has even recommended that wealthy clients allocate up to seven per cent of their portfolio to cryptocurrencies.

The US regulatory landscape has also shifted significantly since Donald Trump became president in 2024, with policymakers passing the country’s first major crypto legislation in July.

These changes show that both regulators and traditional banks are now embracing a sector once viewed as too risky to enter.

As the sector evolves rapidly, banks hoping to keep pace with leaders like Standard Chartered must make digital assets a strategic priority, especially given their vital role in safeguarding customer assets.

With critics such as former chancellor George Osborne warning that the UK is being ‘left behind’ on crypto, it may be time for UK regulators and lawmakers to adopt the open and collaborative approaches seen in markets like the United Arab Emirates and Luxembourg. This would enable national banks to move from experimentation to production and better compete with international peers.

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