Zodia Custody has secured a payment institution license from Luxembourg’s Commission de Surveillance du Secteur Financier, allowing it to offer regulated custody and transfer services for stablecoins across the European Union. The approval expands its existing authorization under the Markets in Crypto-Assets (MiCA) framework and positions the firm to operate more broadly within the region’s evolving regulatory environment.
Expanded regulatory coverage in the European Union
The new license enables Zodia Custody to manage electronic money tokens, a category that includes stablecoins under MiCA rules. Combined with its earlier authorization, the firm can now provide regulated handling and movement of digital assets across EU markets.
The London-based company said the dual licensing structure reduces compliance complexity for institutions operating in multiple jurisdictions and lowers counterparty risks tied to fragmented regulatory oversight. It added that secure infrastructure for stablecoin transfers is becoming a baseline requirement for digital asset platforms operating under EU rules.
Zodia Custody, founded in 2020, focuses on providing digital asset services to financial institutions. Its shareholders include Standard Chartered, Northern Trust, SBI Holdings, Emirates NBD, and National Australia Bank.
Standard Chartered moves toward full control
The regulatory milestone comes as Standard Chartered moves to bring Zodia Custody fully in-house. Bloomberg reported in April that the bank was considering acquiring the firm outright, and on May 18 it confirmed that its non-binding offer had been accepted.
Under the plan, Zodia’s regulated custody operations will be integrated into Standard Chartered’s digital asset custody division. The acquisition is expected to be finalized by the end of August 2026.
The move reflects a broader effort by the bank to streamline operations and eliminate overlapping licensing structures that developed as Zodia matured from a joint venture into a standalone regulated entity.
MiCA drives demand for compliant infrastructure
The new authorization aligns with growing demand for regulated stablecoin services following the full implementation of MiCA in December 2024. The framework introduced clear rules for digital assets across the EU, increasing the need for compliant custody and transfer solutions.
Zodia Custody chief executive Sawyer recently said banks will increasingly need to hold digital assets directly, underscoring the shift among traditional financial institutions from planning to execution.
Euro stablecoin market gains traction
Regulatory clarity under MiCA has fueled growth in euro-denominated stablecoins. The segment reached a market capitalization of about $900 million in mid-2026, more than doubling in the year after the rules took effect.
While still representing a small share of the global stablecoin market, which exceeds $300 billion and is dominated by US dollar-pegged tokens, activity in compliant euro stablecoins has accelerated sharply. Monthly transaction volumes rose 899% following MiCA’s rollout.
At the same time, regulatory enforcement has reshaped the competitive landscape. Non-compliant tokens have been removed from European venues, concentrating liquidity among approved issuers. Circle’s EURC has emerged as a leading player, capturing roughly half of the euro-denominated segment after Tether exited the market ahead of compliance deadlines.
Transition period nears completion
MiCA introduced a passportable licensing regime across the EU, but it also imposed stricter governance and reporting requirements. Transitional arrangements for some existing providers are set to expire on July 1, 2026, adding urgency for firms to secure full compliance.
A January 2026 survey found that 65% of institutional market participants cited regulatory clarity as the main reason for increasing exposure to digital assets this year.
As the transition period closes, market activity is shifting toward fully regulated providers capable of meeting MiCA standards. Large banking groups are also preparing to launch their own compliant euro stablecoins later in 2026, signaling deeper integration of digital assets into traditional financial systems.
For deeper context on compliant digital assets, explore how stablecoins work within today’s evolving regulatory landscape.
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