Standard Chartered Bank Reinvents Crypto Engine: Plans to Establish Prime Brokerage Business, Declares "Ethereum Era" is Coming

International financial giant Standard Chartered Bank is planning to establish a dedicated Prime Brokerage business within its wholly owned venture capital arm, SC Ventures.

This move is seen as a landmark step for traditional banking to deeply participate in the digital asset market, aiming to provide institutional clients with one-stop services such as financing, custody, and cross-market trading. Meanwhile, Geoffrey Kendrick, head of digital asset research at the bank, issued a major forecast stating that 2026 will be the “Year of Ethereum,” with ETH expected to outperform Bitcoin, and an optimistic long-term target of $40,000. This series of actions clearly indicates that established banks are leveraging both business innovation and market analysis to compete vigorously in the emerging institutional-grade crypto financial ecosystem.

Standard Chartered’s Crypto Ambitions: From Custody and Trading to Prime Brokerage

Standard Chartered’s crypto strategy is not a sudden impulse but a step-by-step, interconnected set of moves. The latest disclosed plan shows that this London-headquartered global systemically important bank is working on building a crypto Prime Brokerage within SC Ventures. Although the plan is still in early discussion stages with no fixed launch date, its strategic intent is very clear. Prime brokerage services are central to serving hedge funds, family offices, and other professional investors, offering comprehensive solutions including margin financing, securities lending, clearing, custody, and risk management. Introducing this business into the crypto space means that Standard Chartered hopes to become a key conduit connecting traditional institutional capital with the crypto market.

This initiative is a natural extension of the bank’s previous crypto deployments. Looking back at its development path: the bank first invested in and supported compliant custody firm Zodia Custody and institutional trading platform Zodia Markets, laying the infrastructure and security compliance foundation for crypto involvement. Then, in July last year, Standard Chartered announced it was the world’s first systemically important bank to offer spot crypto trading services to institutional clients, marking a significant leap from behind-the-scenes infrastructure to front-end trading execution. Now, the planned prime brokerage business aims to integrate and upgrade the achievements of the previous steps, providing clients with a seamless, full-featured institutional crypto service ecosystem, greatly enhancing service stickiness and competitiveness.

Choosing to place this new business under SC Ventures rather than the traditional corporate and investment banking divisions reflects strategic regulatory and capital considerations. This is not merely an organizational restructuring but a crucial strategic decision. Under the current international banking capital regulation framework (Basel III), holdings of “unlicensed” crypto assets (such as Bitcoin and Ethereum) on bank balance sheets face risk weights of up to 1,250%. This stringent requirement makes large-scale crypto activities within core banking operations extremely costly. Operating through a venture capital unit can cleverly circumvent this capital constraint, allowing more flexible and efficient innovation, opening a strategic window for banks to explore new avenues within compliance.

Breaking the Capital Constraint: The Strategic Buffer Role of SC Ventures

Placing the crypto prime brokerage under SC Ventures is a clever move for Standard Chartered to respond to the current rigid regulatory environment. To understand the significance of this move, we must examine the “punitive” capital requirements for crypto assets under Basel III. According to the rules finalized at the end of 2022, banks must assign a risk weight of 1,250% to exposures in mainstream crypto assets like Bitcoin and Ethereum. In comparison, even high-risk venture investments are typically assigned a 400% risk weight in certain cases. This means that if a bank wants to hold $100 worth of Bitcoin, it might need to hold over $100 in capital to cover potential risks, which practically kills the economic viability of large on-balance-sheet crypto holdings or market-making.

As an independent venture capital unit, SC Ventures operates under very different logic and capital constraints from traditional deposit-taking divisions. It is essentially a “strategic experimental zone” designed to explore fintech frontiers and incubate innovative business models. Operating here allows agility and flexibility akin to a startup, without immediately bearing the heavy capital burdens imposed on core banking operations. This structure grants Standard Chartered valuable room for trial and error and a time window to develop crypto activities at manageable costs, even as global regulations are still evolving and internal risk models are being refined.

In fact, SC Ventures has already laid the groundwork for this role. As early as December last year, the department revealed on LinkedIn that it was developing a digital asset joint venture called Project37C, described as a “lightweight financing and market platform” covering custody, asset tokenization, and market access. Although not explicitly called a “prime broker” at the time, its described functions closely overlap with core prime brokerage services. This indicates that Standard Chartered’s crypto deployment is a carefully planned, phased system project. SC Ventures is not only a “firewall” but also an “innovation incubator” and “regulatory sandbox,” ensuring that the bank embraces crypto innovation while keeping risk within clearly controlled boundaries.

Basel III Bank Crypto Asset Capital Requirements Comparison

To better understand why Standard Chartered’s architecture choice makes sense, here is a brief comparison of key regulatory requirements:

• Unlicensed crypto assets (e.g., Bitcoin, Ethereum) risk weight: 1,250%
  • Impact: Extremely high capital costs, effectively limiting on-balance-sheet holdings or market-making.
• High-risk venture investments (in some cases) risk weight: 400%
  • Impact: High capital requirement but significantly lower than crypto assets, reflecting regulatory familiarity with traditional high-risk assets.
• Operating through independent entities (e.g., SC Ventures)
  • Strategy: Segregate business into subsidiaries or affiliates subject to different capital frameworks, avoiding direct high capital charges on the bank’s main entity.
• Current global regulatory developments
  • Progress: As of October 2023, regulators like the Basel Committee are reportedly discussing revisions to bank crypto asset holding rules, with potential future adjustments to risk weights, but new regulations are not imminent.

Crypto Prime Brokerage: The Critical Arena for Institutional Entry

Standard Chartered’s involvement is not an isolated event but points to a broader industry trend: Crypto Prime Brokerage is becoming a strategic battleground among traditional financial giants and crypto-native institutions. In traditional finance, prime brokers serve large professional investors as “super service providers,” offering integrated solutions for managing complex trading, financing, and custody needs efficiently in one place. Transferring this model to the crypto world, its value is amplified by the surge of institutional capital entering the space.

With US spot Bitcoin ETFs approved over two years ago, managing assets have soared to about $140 billion, and more products based on assets like Ethereum are in the pipeline. Institutional investors’ demand for crypto allocation has shifted from “whether to invest” to “how to invest efficiently, securely, and cost-effectively.” They need to handle cross-exchange and decentralized platform trading, flexible fiat and crypto financing channels, and compliant custody services. A single exchange or custody provider can no longer meet these complex needs, making the all-in-one prime broker the ideal solution. This market segment has become a hotbed of M&A activity, exemplified by Ripple’s acquisition of Hidden Road and FalconX’s agreement to acquire 21Shares, highlighting its importance as a key growth driver.

As a longstanding international banking giant, Standard Chartered’s entry carries significant symbolic and practical advantages. It brings a century-old global credit network, rigorous AML and KYC processes, and deep institutional trust—assets that new crypto-native firms have spent years building. Additionally, its strong presence in emerging markets like Asia, Africa, and the Middle East, where crypto adoption and innovation are rapidly growing, provides a unique growth opportunity. Its entry signals that competition in crypto prime brokerage will quickly evolve from “functional completeness” to “compliance, creditworthiness, and global network” competition.

Why Does Standard Chartered See Ethereum (ETH) as the “Year of Ethereum” in 2026?

While actively expanding its business lines, Standard Chartered’s research team has also issued a “hot take.” Geoffrey Kendrick, head of global digital asset research, explicitly calls 2026 the “Year of Ethereum,” predicting ETH will outperform BTC. This judgment is based on in-depth analysis of Ethereum’s fundamentals and the driving forces of the current market cycle. Kendrick points out that, in the current market cycle led by traditional financial institutions, Ethereum exhibits broader and deeper “correlation” or utility than Bitcoin.

This fundamental advantage is reflected in several aspects. First, Ethereum is the undisputed dominant platform for stablecoins, real-world asset tokenization (RWA), and decentralized finance (DeFi)—areas that serve as bridges connecting blockchain with traditional economic activities, directly generating cash flow and practical value. Second, ongoing network upgrades (such as the Dencun upgrade) continue to reduce Layer 2 transaction costs and increase throughput, enhancing Ethereum’s scalability and economic viability as a global settlement layer. Lastly, regulatory clarity, such as the potential passage of the U.S. “Clarity Act,” will provide clearer compliance pathways for financial applications on Ethereum. These factors together support Ethereum’s evolution from a “digital gold” narrative to a “global open financial infrastructure.”

Kendrick’s forecast also provides specific price targets: reaching $7,500 in 2026 and a long-term target of $40,000 by 2030. From a technical analysis perspective, Ethereum’s current price, after forming a local bottom near $2,750, is building a higher low and forming a bullish “head and shoulders bottom” pattern’s right shoulder. Momentum indicators like RSI and MACD also show signs of bottoming and potential bullish crossovers, supporting an upward trend. If the price successfully breaks above the current ascending channel’s upper boundary and challenges the previous high of $4,950, it could open the way toward $7,500 and even $10,000.

Key Points of Standard Chartered’s ETH Analysis and Forecast

Synthesizing the bank’s research insights and technical analysis, the core points are:

• Main thesis: 2026 is the “Year of Ethereum,” with ETH expected to outperform BTC.
• Fundamental drivers:
  • Dominance in stablecoins, RWA, and DeFi.
  • Network upgrades improving scalability and reducing costs.
  • Regulatory clarity enhancing application compliance.
• Price targets:
  • Mid-2026: $7,500.
  • By 2030: $40,000.
  • Technical breakout potential: reaching $10,000 in 2026 (about 220% above current levels).
• Technical pattern: Daily chart may be forming a bullish “head and shoulders bottom” right shoulder; breaking the neckline confirms the trend.
• Key premise: Continued on-chain activity in traditional finance and positive regulatory expansion outside the US.

The Inescapable Fusion of Traditional Finance and Crypto

Standard Chartered’s actions and analysis exemplify how traditional financial institutions are accelerating their embrace of digital assets. Across the Atlantic, US banks are also making aggressive moves under a policy environment friendly to crypto, supported by the Trump administration. JPMorgan is reportedly considering offering crypto trading services to institutional clients; Morgan Stanley has filed to launch spot ETFs for Bitcoin, Ethereum, and Solana, aiming to compete with asset managers like BlackRock and ARK. These signals all indicate that crypto assets are rapidly being integrated into mainstream financial services and asset allocation frameworks.

This integration is a two-way process. On one hand, the crypto market has matured over more than a decade, with market cap, liquidity, and infrastructure now capable of supporting large institutional flows. On the other hand, traditional financial institutions face growth pressures, changing client demands, and the need to stay relevant in the new tech era—crypto assets and blockchain technology represent a significant innovation and growth opportunity. Standard Chartered’s exploration of the prime broker model through SC Ventures embodies this “proactive change” mindset. It is not just testing on the fringes but aiming to build influence at the core of crypto financial services.

Looking ahead, whether Standard Chartered’s crypto prime broker succeeds and whether its Ethereum forecast materializes will depend on multiple factors. Regulatory evolution (especially Basel framework revisions), actual institutional capital inflows, developments in Ethereum’s ecosystem, and macroeconomic conditions will all be decisive. But regardless, the entry of veteran players like Standard Chartered, with global networks, deep capital, and research strength, is accelerating the arrival of the “institution-led” era they envision. For ordinary market participants, this signals a profound structural shift: the crypto market is undergoing a deep transformation, with its rules, volatility, and value discovery mechanisms being rewritten through ongoing collision and integration with traditional finance.