Zodia Custody has announced a strategic partnership with 21Shares, aimed at bolstering custody services for physically-backed crypto exchange-traded products (ETPs) in Switzerland and the broader European market. This collaboration seeks to provide 21Shares investors with enhanced security and regulatory compliance for their crypto investments.

Enhancing Security and Compliance for Investors

The partnership between Zodia Custody and 21Shares is set to offer an additional layer of security for investors in 21Shares’ physically-backed ETPs. Zodia Custody, known for its industry-leading cold storage infrastructure and streamlined compliance solutions, will enable institutions using 21Shares' ETP investments to access secure cold-storage wallets with 24/7 instant availability.

Mandy Chiu, head of financial product development at 21Shares, highlighted the advantages of this collaboration: "Zodia Custody's industry-leading cold storage infrastructure and streamlined compliance solutions ensure our investors benefit from the most advanced and diversified custodial services available."

Julian Sawyer, CEO of Zodia Custody, emphasized the broader impact of this partnership, stating that it "will have a real impact on the whole ecosystem – without any compromise on security, risk management, or compliance.”

Rising Institutional Demand for Crypto ETPs

The partnership comes at a time when institutional demand for crypto ETPs is on the rise. According to data from 21Shares, by the end of Q1 this year, 937 professional investors held $11 billion in U.S. spot Bitcoin exchange-traded funds (ETFs), accounting for around 20% of the total assets of these ETFs. In comparison, gold ETFs had only 95 professional investors in their first quarter post-launch, representing less than 10% of Bitcoin ETFs' reach.

Zodia Custody noted a significant increase in demand for ETPs, emphasizing that "institutions require greater security and custody services throughout the issuance to redemption lifecycle."

Expanding Custodial Services in Europe

21Shares AG, which issues cryptocurrency-backed ETPs in various global markets outside the U.S., now offers 40 ETPs across 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, established in 2021 by Standard Chartered and Northern Trust, with investments from SBI and National Australia Bank, is well-positioned to provide robust custodial services to meet the growing needs of institutional investors in the crypto market.

The partnership between Zodia Custody and 21Shares marks a significant step forward in enhancing the security and compliance of crypto ETPs for European investors. As institutional demand for crypto investment products continues to grow, this collaboration aims to provide the necessary infrastructure and support to ensure the safe and efficient management of these assets. With Zodia Custody’s advanced cold storage and compliance solutions, 21Shares is poised to offer its investors unparalleled custodial services, paving the way for broader adoption and trust in the cryptocurrency market.