Absa becomes first African bank to offer digital-asset custody

Absa adds digital-asset custody for South African institutions

Absa Group Ltd. has become the first bank in Africa to offer custody services for digital assets. Custody means holding assets such as bitcoin and other cryptocurrencies on behalf of clients, in the same way a bank holds cash and investments for its customers.

The Johannesburg-headquartered lender said it will offer safekeeping, administration and transfer services to institutional clients in South Africa. The clients it is targeting include asset managers, non-bank financial institutions and corporates, or large companies.

What the announcement covers

• Absa is the first bank on the African continent to offer digital-asset custody.
• Services will cover safekeeping, administration and transfers of digital assets.
• The first customers are institutional clients in South Africa, including asset managers, non-bank financial institutions and corporates.
• Bloomberg reported that the bank is targeting a market estimated at about $1.5 billion.

What is not yet clear

The announcement, as reported by Bloomberg, does not set out which digital assets will be supported, what fees will apply, when the service will go live, or whether the bank holds the assets itself or works with an outside custodian. The source material also does not say whether the service will expand beyond South Africa later on.

Why banks are moving into custody

Absa's move comes as banks outside Africa have also entered the digital-asset custody business, and the company said it wants to serve a market that Bloomberg puts at about $1.5 billion. The size of that figure is an estimate reported by Bloomberg, not a confirmed figure from Absa itself.

Sources

• Bloomberg