Dive Brief:
- Digital asset bank Anchorage Digital has expanded into Asia with five institutional partners, including Singapore-based blockchain investment firm FBG Capital and Hong Kong venture firm IOSG Ventures, according to an announcement last week. Also partnering with Anchorage are digital assets financial services provider Antalpha, cryptocurrency exchange Bitkub and asset management firm Dream Trade.
- Diogo Mónica, Anchorage’s co-founder and president, said he expects Asia to represent up to 25% of his company’s business within the next year and a half, adding he aims to put a sharp focus on Singapore, according to Fortune.
- “The validation from partnering with these institutions shows that Anchorage is not only a growing player in the region, but that our offerings have strong global appeal,” the company’s statement said. “We look forward to deepening our relationships in the region to bring customized solutions and secure, regulated custody to Asia’s most important financial institutions — further expanding access to digital assets in this critical market.”
Dive Insight:
The San Francisco company’s first real international push follows its recent foray in a Japanese yen-denominated stablecoin project with Tokyo-based GMO-Z.com Trust Company.
Its emphasis on Asia stands to reason: South and Central Asia have some of the highest rates of digital asset adoption, with Vietnam, Philippines and Thailand in the top 10 on Chainalysis’ 2022 Global Crypto Adoption Index, and Indonesia ranking 20th.
Anchorage, the first crypto firm to receive a trust bank charter from the Office of the Comptroller of the Currency (OCC), has focused its services on large businesses rather than retail customers since Mónica and Nathan McCauley founded it in 2017. Valued at over $3 billion with backers like KKR, Goldman Sachs and Andreessen Horowitz, Anchorage provides crypto-based services including custody and buying and selling to banks, venture capital firms and wealth funds.
Anchorage’s OCC approval makes it an attractive partner to banks dipping their toes into crypto — a position that, as Mónica told Fortune, would be harder to come by today given federal agencies’ crackdowns on such relationships.
“Given crypto conditions, the tone has shifted because the market has shifted,” Mónica told Fortune. “[Anchorage] demonstrates that audits and having oversight really is important for the space.”
Anchorage’s newest partners find an appeal in that oversight, with Antalpha Chief Investment Officer Will Chiu expressing in a prepared statement that his company “appreciate[s] Anchorage’s attention to regulatory compliance and vetting of the digital assets they support” and GMO-Z.com Trust Company CEO Ken Nakamura noting, “Anchorage’s secure institutional platform advances the global expansion of crypto, a mission that we share through institutional adoption of stablecoins.”
Singapore has emerged as a regional crypto market hub, in part due to China’s ban on crypto last year.
Monetary Authority of Singapore Managing Director Ravi Menon said in August, however, that he’s mulling restrictions on crypto. Menon had said in November that it was best not to “clamp down or ban these things,” but he reversed course after the demise of Singapore-based hedge fund Three Arrows Capital and other recent crypto woes.
Mónica told Fortune that because his firm works with businesses rather than retail customers, he embraces enhanced regulation.
“Compared to the U.S., with its infighting between regulators and turf wars, it’s a breath of fresh air to have one regulator [in Singapore],” Mónica told Fortune. “From a tone and tenor perspective, it’s still pro-crypto, although more focused on consumer protections.”
