Cryptobank Anchorage pushes into Asia

Dive card:

• 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 cooperation with Anchorage is provider of financial services for digital assets Analpha, cryptocurrency exchange Bitkub and asset management company Dream trade.
• Diogo Mónica, Anchorage’s co-founder and president, said he expects Asia to represent up to 25% of the company’s business over the next year and a half, adding that he aims to put a sharp focus on Singapore, according to Fortune .
• “The confirmation from collaboration 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 safe, regulated custody to Asia’s key financial institutions – further expanding access to digital assets in this critical market.”

Diving Insights:

The San Francisco company’s first real international push follows its recent foray into a Japanese yen-denominated stablecoin project with Tokyo-based GMO-Z.com Trust Company.

Its emphasis on Asia is reasonable: South and Central Asia have some of the highest rates of digital asset adoption, with Vietnam, the Philippines and Thailand in the top 10 of Chainalysis’ 2022 Global Crypto Adoption Index, and Indonesia in 20th place.

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 enterprises rather than private clients since Mónica and Nathan McCauley founded it in 2017. Valued at over $3 billion with backers such as KKR, Goldman Sachs and Andreessen Horowitz, Anchorage offers 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 for banks dipping their toes into crypto—a position that, as Mónica told Fortune, would be harder to come by today given federal agencies’ crackdown on such matters.

“Given the crypto situation, the tone has changed because the market has changed,” Mónica told Fortune. “[Anchorage] shows that audits and having supervision are really important for the place.”

Anchorage’s newest partners find an appeal in that oversight, with Analpha Chief Investment Officer Will Chiu expressing in a prepared statement that his company “appreciates[s] Anchorage’s attention to regulatory compliance and control of the digital assets it supports” and CEO of GMO-Z.com Trust Company, Ken Nakamura, noted: “Anchorage’s secure institutional platform promotes the global expansion of crypto, a mission that we share through institutional use 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 Chief Executive Officer Ravi However, Menon said in August that he is thinking about 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 the Singapore-based hedge fund Three Arrows Capital and other recent crypto issues.

Mónica told Fortune that because his firm works with businesses rather than retail clients, he embraces improved regulation.

“Compared to the US, with its regulatory infighting 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, albeit more focused on consumer protection.”