Julian Sawyer is CEO of Zodia Custody, a digital asset custodian backed by Standard Chartered, in association with Northern Trust and SBI Holdings. Zodia Custody provides bank-grade custody services for institutional investors in digital assets, enabling them to enter the digital asset space within the same structure of security and compliance required in traditional financial services. This is a vital character for success in the digital asset sector.
In our wide-ranging dialogue with Julian, a professional with an extensive background in traditional financial services and Fintech, we delved into the dynamic world of digital assets. We explored the crucial role of custody, the importance of regulatory frameworks, the rapidly evolving digital asset landscape, and the future of Zodia Custody and the wider industry.
Our conversation with Julian is shared below.
Crowdfund Insider: Can you tell us more about Zodia Custody and the journey from its launch in 2020?
Julian Sawyer: Everything in finance must begin with the necessary infrastructure. That was the premise of our creation – to build that infrastructure from the ground up for the new digital asset frontier. A key part of this is segregating exchanges from custody.
Since our launch in 2020, time and again we’ve placed security, risk management and regulatory compliance at the heart of everything we do and build. This has never been more important than now, in the post-FTX landscape we find ourselves in. Our banked-backed heritage with Standard Chartered gives us an inside look into exactly what institutions need to succeed in digital assets. Our perspective is if institutions have a safe place to store their digital assets, they will be more inclined to invest, which, in turn, will foster an ecosystem of growth and development for the industry.
Just last year, we launched our Interchange product, an off-exchange settlement solution that provides insolvency protection for institutional investors, while mirroring assets held in custody when trading in exchanges. As a result, institutions can trade safely with added reassurance on the security of their holdings. Over the course of this year, we’ve worked with a number of key industry players, including LMAX Digital, Hidden Road, BlockFills, Blockdaemon, and Open Eden. We’ve also grown a lot this year, with new offices across the globe, including in Ireland, Luxembourg, the UAE, Japan, Singapore, Hong Kong and Australia.
Crowdfund Insider: Your past four expansion announcements were all in the APAC region – could you explain the reasons behind that?
Julian Sawyer: Japan, Singapore, Hong Kong and Australia have all shown the will to welcome and nurture digital assets into their economies. On top of that, they have some of the most advanced regulatory frameworks for digital assets in the world. We want to help evolve this further. That’s why we’re developing a thriving digital asset ecosystem that works in tandem with, and not against, compliance and governance, in the geographies our clients are present.
Crowdfund Insider: Zodia Custody is backed by Standard Chartered – could you tell us more about what that means for the company?
Julian Sawyer: Being bank-backed is not just a major boon to our credentials, but something that gives us a powerful insight into institutional needs in digital assets. We come in with a deeper understanding of what financial institutions need, and what they expect when it comes to regulation, compliance, and security.
As a result, we can speak to financial institutions from a foundation of trust, which is paramount. Should the worst ever happen, be it an exchange going insolvent or subject to a cyberattack, clients know their assets will not be lost. The same would be true even if Zodia Custody were to go insolvent.
Crowdfund Insider: What sets Zodia Custody apart from other digital asset custodians out there?
Julian Sawyer: Aside from our bank-backed heritage and insolvency protection, we seamlessly integrate traditional custody principles and banking expertise with the agility expected of a fintech. As a result, rigorous standards and expectations of institutional investors are not just met but exceeded. We have built a platform that is dynamic and adaptive to the ever-evolving needs of the investors and the market.
Crowdfund Insider: What are the biggest challenges that institutional investors face in the digital asset market?
Julian Sawyer: The digital asset industry is still maturing, especially from a regulatory perspective. No matter how innovative or future-gazing any institution might be, it can only go so far without regulatory clarity and safeguards. It is that uncertainty that is proving the biggest obstacle to wider-scale adoption of digital assets.
For our part, we work with clients and regulators alike to create the infrastructure that works for all parties to facilitate robust standards of governance, compliance and security, without stifling innovation.
Crowdfund Insider: What are Zodia Custody’s main priorities moving forward?
Julian Sawyer: Our main priority is, and has always been, building the products and services institutions need to enter digital assets safely and at scale. We have stayed true to this from the moment of our founding, and everything we do has been centred on building a robust market infrastructure and a thriving digital asset ecosystem for institutions. As the market matures and participation increases, having the right tools and products to hand will become ever more important.
Crowdfund Insider: What would be your predictions for the digital asset ecosystem in the next five years?
Julian Sawyer: We expect to see an uptick in the pace of regulation, and the uptake of institutional participation in digital assets. Europe and APAC have already made significant progress in creating a roadmap to integrate this market into their respective economies, recognising its potential to become part of the mainstream payment space. We see this, for example, with the adoption of stablecoins.
Speaking about the future, it is also important to reflect on how the industry has changed in the past year with the end of the FTX saga. Its initial threat to completely collapse the market resulted in quite the opposite – a paradigm shift of attitudes towards the future of digital assets, where safety and compliance are of utmost importance. The past twelve months have taught us many valuable lessons, which have been reiterated by Binance’s recent troubles. The vital thing is this: we have become stronger and more transparent as an industry, and we are entering the next chapter of digital assets.