Zodia Custody partners with 21Shares for crypto ETP custody services in Europe

Zodia Custody has partnered with 21Shares to provide custody services for physically backed crypto exchange-traded products (ETPs) in Switzerland and the wider European market.

The partnership aims to give 21Shares investors an additional layer of security and regulatory compliance for its physically-backed ETPs, according to Zodia Custody. Additionally, institutions using 21Shares for ETP investments will gain access to cold-storage wallets, with 24/7 instant access.

Speaking about the benefits of the partnership, 21Shares' head of financial product development Mandy Chiu said that Zodia Custody has "industry-leading cold storage infrastructure and streamlined compliance solutions, ensuring our investors benefit from the most advanced and diversified custodial services available."

Zodia Custody CEO Julian Sawyer said the partnership, "will have a real impact on the whole ecosystem – without any compromise on security, risk management, or compliance.” 

Crypto demand from institutional investors

According to data from 21Shares, by the end of Q1 of this year, 937 professional investors owned $11 billion in U.S. spot bitcoin exchange-traded funds (ETFs)—around 20% of the ETFs’ total assets. By contrast, gold ETFs had only 95 professional investors in their first quarter post-launch, representing less than 10% of bitcoin ETFs’ reach.

According to today's Zodia Custody statement, there has been a sharp increase in ETP demand, and that "institutions require greater security and custody services throughout the issuance to redemption lifecycle."

21Shares AG issues cryptocurrency-backed ETPs in various global markets outside the U.S. The asset manager now offers 40 ETPs in Europe. In July 2020, 21Shares AG had selected Coinbase Custody to store its digital assets for the 21Shares Bitcoin ETP, which was Europe’s first physically-backed bitcoin ETP.

Zodia Custody was founded by Standard Chartered and Northern Trust in 2021, with SBI and National Australia Bank as investors.