Absa Group has become the first bank on the continent to offer digital-asset custody as it seeks to tap a market estimated at about $1.5 billion.

The Johannesburg-headquartered lender will offer its South African asset institutional clients — which include asset managers, non-bank financial institutions and corporates — with secure safekeeping, administration and transfer services for digital assets.

“We expect to extend this to other client segments in South Africa in due course, and are actively working on bringing the solution to some of our other African presence countries in line with regulatory approvals required,” said Rob Downes, head of digital assets at Absa’s corporate and investment banking unit.

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The bank received approval from South African regulators for the service that currently supports Bitcoin, XRP Ledger, Ethereum and USDC. Absa wants to expand to support other assets.

“Bitcoin is the predominant asset in custody,” Downes said. The lender is working with clients to support “other crypto assets they would like to be custodied in South Africa.”

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The South African Reserve Bank estimates that crypto assets under custody at the nation’s three biggest licensed service providers — Luno, VALR and Ovex — more than doubled to R25.3 billion ($1.5 billion) by the end of 2024 from less than R10 billion at the start of 2023.

The worldwide custody market is valued at roughly $953.5 billion by 2026, and is projected to grow to as much as $4.38 trillion by 2033.

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