Digital Assets Down Under: Empowering Institutions in Australia’s Evolving Regulatory Landscape

Faced with imminent regulatory changes to the Australian digital asset landscape, now is the time for institutions to make some moves and set themselves up for success.

Safeguarding digital assets with a specialist, registered custodian like Zodia Custody, and making best use of our world-class connectivity will be what helps get them there.

This article explores how Zodia Custody offers unique value to Australian institutions, including exchanges, asset managers, family offices and wealth managers. We’ll also dive into the importance of collaboration and connectivity with SAF3 and Interchange Connect, and how we’re challenging traditional notions of competition for the better.

A new face for a new regulatory landscape

While Zodia Custody might be a relatively new name in Australia, we bring with us not just the hunger of a freshly founded fintech, but also the deep understanding of what financial services clients really need, five years in the making. We bring a wealth of expertise that is recognised by National Australia Bank, and backed by global institutions like Standard Chartered, Northern Trust and SBI Holdings.

We’ve just launched our digital asset custody platform, SAF3, unique to the Australian market. Perfect timing, in readiness for upcoming regulatory changes proposed by the Department of the Treasury which will likely require digital asset platforms to obtain an Australian Financial Services Licence (AFSL). Zodia Custody Australia welcomes the Government’s proposed framework, and we’re readying ourselves for our clients to have peace of mind they will meet upcoming regulatory obligations.

How do we deliver on this promise? Our dedicated team on the ground in Australia are actively working to adhere to the very best standards and tightest of controls, boosting our already impressive credentials achieved with the FCA in the UK, the CSSF in Luxembourg, and with the Central Bank of Ireland. That’s before we even start counting the work we are doing in Japan, Singapore and Hong Kong. All this means that our commitment to safekeep digital assets on behalf of our clients is simply unmatched – both in Australia and around the world.

Specialist, qualified custodian

By offering cold wallet storage with 24/7 instant availability, we eliminate key risks associated with other forms of custody still prevalent in Australia. Self-custody, for example, leaves responsibility for safeguarding clients’ and businesses’ digital assets with the crypto exchange, wealth manager or family office themselves, creating significant exposure. Soon, many of these players will have to obtain an AFSL for holding or managing digital assets, adding another layer of regulatory complexity.

In contrast, Zodia Custody Australia’s specialist approach can mitigate against the above, as well as the risk of the loss of private keys, human error causing transactional mistakes, operational complexity, and physical risk brought by self-custody.

Harmony over disruption

But for institutions that aren’t ready to completely change their digital asset management strategy just yet, now is the perfect time to hop on board and try us out alongside your existing setup, before time runs out to make important decisions.

Zodia Custody Australia’s SAF3 platform with our Interchange Connect service means institutions can get the best of both worlds and leverage the expertise of multiple custodial and digital asset software providers in Australia – including the likes of Fireblocks – and get the most out of the wider ecosystem without added operational complexity.

Interchange Connect allows institutions to use a network-of-networks to transfer digital assets across their accounts and wallets, and benefit from off-exchange settlement on their trades, while mitigating potential counterparty risk exposure on other providers’ networks. Crucially, this also ensures an additional layer of security, risk management, and solvency protection when trading digital assets.

By being interoperable by design, institutions in Australia can use both Fireblocks and Zodia Custody Australia together to achieve a holistic digital asset management strategy. This way, there’s no need to pick one or the other.

A new dawn for Australian digital assets

Digital assets have a bright future in Australia. Having the right approach to custody will be what determines how soon the financial system will reap the benefits of this emerging asset class and innovative technology.

By employing our network-of-networks strategy, we’re not just the most qualified custodian, but also the most connected. Reach out today and learn more about how we’re building the future of digital assets in Australia and beyond.