Chris Soriano

Ten years ago, the question was binary: does your bank have a presence in crypto or not. Between the volatility and highly speculative nature of the tech, nearly every institution held varying degrees of uncertainty. 

This question, though, feels increasingly anachronistic as banks, regulatory agencies and governments prepare for what feels like an inevitably rising tide of on-chain finance. Earlier this month, for example, twenty-one of the world’s biggest banks agreed to build a stablecoin pegged to the US dollar, targeting a launch window tied to the first half of 2027. The group consists of several titans of the banking industry including Citi, Goldman Sachs, Wells Fargo, Deutsche Bank, Bank of America, UBS, Santander, and more than a dozen others.  

Only a few short months earlier, Standard Chartered (a single bank most Americans probably couldn’t name) quietly became the first globally important bank to run its own crypto trading desk and start executing prime brokerage trades against its own balance sheet. Nearly every bank of consequence is in on crypto, at least to a certain extent. The better question, now, is the one that separates winners from spectators.  

There are two different paths for banks to be in crypto. One is building the rails, stablecoins, tokenized deposits, and settlement infrastructure. That work is fee based, fully reserved, mostly off the balance sheet and where almost every big bank has landed. The other path is a bit scarier: taking market risk, trading crypto as principal, holding it in custody at scale, lending against it, and running a real prime brokerage. This path requires banks to put their own capital behind a volatile asset, and very few are willing to do it. 

Standard Chartered can be counted as one of the few, and they’ve been building since 2024. Between custody in the UAE and Luxembourg, it became the first globally systemic bank to trade crypto as principal. This year it bought out Zodia to fully bring custody in-house, took a stake in a crypto market maker GSR, and started running live prime brokerage trades. These decisions reflect the strategy of a bank that is looking to move their entire on-chain system under one roof.  

JPMorgan, on the other hand, sits on the opposite end. While they’ll trade crypto for clients, JPMorgan has said in plain language that they won’t maintain custody. 

I spent most of my career on FX desks. In FX, credit and execution have always lived on the same desk. You don’t get one without the other, because the moment a client’s position moves against them, someone has to be able to trade out of it immediately, not after a committee meets. The same logic applies here. A bank that lends against crypto but can’t liquidate the collateral if a client blows through margin has no real way to manage that risk. 

Prime brokerage in any asset class has always meant custody, financing and execution bundled together, precisely because you need all three to control the risk of any one of them. Crypto has changed plenty about how that risk shows up and made the cost of getting it wrong more visible, because the capital treatment for holding crypto inventory is still punitive enough that most banks would rather not find out their risk exposure the hard way.  

What’s happening now is that most banks are building the same low risk product as twenty of their competitors, while a much smaller group is taking on real risk and, in return, building the kind of relationship a client doesn’t walk away from. Custody leads to financing which typically leads to a client trusting you with everything else they need. That sticky relationship is a much harder thing for a competitor to replicate than another stablecoin. 

There’s a case that those twenty-one institutions have this right, and Standard Chartered moved before the rest of the market was ready. Yes, patience has worked for big banks before. Let someone else spend the money figuring out a new market, then move once the rules and the potential risks are clearer. Standard Chartered is carrying real exposure on one of the most volatile assets that exists, and under today’s capital rules that inventory isn’t cheap to hold even when nothing goes wrong. 

But sitting out carries just as much risk, and it’s just as hard to price. A bank that waits for the rules to settle is also betting the client relationship will still be there to win once it finally shows up, and that catching up to a two-year head start is easier than it usually is. Standard Chartered deserves credit for being the one willing to find out which bet was actually the safer one.  

Maybe those who were patient and capital light will win, the way it usually happens in a new market. Or maybe the banks who waited will end up owning the parts of the client relationship that never mattered much, while those that took the risk like Standard Chartered own the relationships that do. Ask which bank made the right bet again in five years and I’d bet you’d have a different answer.