Quick Take
SC Ventures, the fintech arm of Standard Chartered, is teaming up with SBI Holdings to launch a $100 million Digital Asset Joint Venture in the UAE. With the UAE’s growing prominence in the digital asset space, the joint venture aims to invest in a wide range of digital asset sectors, from market infrastructure to DeFi, further solidifying the region’s position as a fintech hub. The partnership will see investments ranging from seed to Series C funding on a global scale.
Standard Chartered’s SC Ventures and SBI Holdings Establish Digital Asset Joint Venture in UAE
In a strategic move aimed at capitalizing on the burgeoning crypto asset ecosystem, SC Ventures, the innovation and fintech investment arm of Standard Chartered, has joined forces with SBI Holdings, a prominent Japanese financial conglomerate, to establish a Digital Asset Joint Venture investment company in the United Arab Emirates (UAE). The collaboration intends to infuse the venture with a substantial initial investment of $100 million, signifying a robust commitment to exploring the emerging opportunities in the digital asset space.
The UAE’s Rise as a Fintech Hub
The decision to establish this Digital Asset Joint Venture in the UAE underscores the region’s growing prominence as a thriving hub for fintechs and digital asset initiatives. A combination of favorable regulations, strengthening infrastructure, and a burgeoning pool of talent has positioned the UAE as an attractive destination for businesses venturing into the digital asset realm.
Alex Manson, CEO of SC Ventures, expressed enthusiasm about the venture’s prospects, stating, “The Digital Asset Joint Venture will be an important vehicle to explore the emerging digital asset ecosystem opportunities globally.” Manson also highlighted SC Ventures’ extensive experience in the digital asset sector, citing investments in fintech heavyweights such as Ripple and Metaco and ventures like Zodia Custody and Zodia Markets as valuable assets.
Strategic Investments in the Digital Asset Ecosystem
The Digital Asset Joint Venture’s mission extends beyond financial capital injection. It plans to make strategic and minority investments across a spectrum of areas within the digital asset ecosystem. These areas include market infrastructure, risk management, and compliance tools, decentralized finance (DeFi), tokenization, consumer payments, and the Metaverse.
Yoshitaka Kitao, Representative Director, Chairman, President & CEO of SBI Holdings, Inc., echoed this sentiment, emphasizing the importance of their strategic partnership in the digital asset space. Kitao stated, “Our Digital Asset Joint Venture plans to make strategic and minority investments in areas such as market infrastructure, risk management and compliance tools, DeFi, tokenization, consumer payments, and the Metaverse.” He further stressed the importance of the collaboration, citing previous investment ventures with SC Ventures.
Building on Existing Collaborations
This Digital Asset Joint Venture comes as the latest development in a series of strategic moves by Standard Chartered in the digital asset space. In May 2023, the bank signed a memorandum of understanding with the Dubai International Financial Centre (DIFC) to explore collaboration opportunities, particularly in the area of digital asset custody.
Furthermore, SC Ventures recently divested its stake in Metaco SA, a Swiss-based technology firm specializing in software infrastructure for digital asset management. This divestment marked a significant milestone for SC Ventures, as U.S. cryptocurrency firm Ripple acquired Metaco for a noteworthy sum of US$250 million, solidifying Ripple’s position as a key portfolio company for SC Ventures.
Salmaan Jaffery, Chief Business Development Officer of DIFC, commended the partnership, saying, “In a world where the conversation around digital assets has rapidly evolved from ‘why’ to an eagerly anticipated ‘when,’ DIFC stands at the forefront of regulation.” He highlighted DIFC’s role in nurturing an environment conducive to investment, exponential growth, and innovation in the digital asset space.
Global Investment Focus
The Digital Asset Joint Venture’s investment strategy is expected to span from seed funding to Series C, with a global focus. This approach reflects the venture’s ambition to contribute to the shaping of the future of finance on a global scale.
As digital assets continue to gain traction in the financial industry, this collaborative effort between SC Ventures and SBI Holdings exemplifies the growing importance of strategic partnerships in navigating the evolving landscape of fintech and digital asset innovation. With the UAE as its launchpad, the Digital Asset Joint Venture appears poised to explore and capitalize on the exciting opportunities presented by the digital asset ecosystem worldwide.
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