Absa Group is moving deeper into Africa’s fast-growing digital-asset market, becoming the first bank on the continent to offer institutional digital-asset custody as demand for regulated crypto infrastructure expands.

The Johannesburg-headquartered lender has received regulatory approval in South Africa to provide secure safekeeping, administration and transfer services for digital assets. The initial offering is aimed at institutional clients, including asset managers, non-bank financial institutions and corporates.

The move gives Absa an entry point into a South African crypto-custody market that was worth R25.3 billion ($1.5 billion) at the end of 2024, according to the South African Reserve Bank.

Absa targets institutional crypto demand

Absa’s custody platform currently supports Bitcoin, XRP Ledger, Ethereum and USDC, with plans to add more digital assets as client demand develops.

“Bitcoin is the predominant asset in custody,” Rob Downes, head of digital assets at Absa’s corporate and investment banking unit, said. The bank is also working with clients to determine which additional crypto assets should be supported for custody in South Africa.

The bank plans to extend the service beyond institutional clients in South Africa and is working toward introducing the offering in other African markets where Absa operates, subject to the necessary regulatory approvals.

That expansion could give the lender a broader role as African financial institutions, asset managers and companies assess how to hold and administer digital assets through regulated banking infrastructure.

Crypto custody market expands

The scale of the opportunity is already visible in South Africa. Crypto assets held by the country’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 beginning of 2023.

The broader global custody market is also projected to expand sharply. It is estimated at about $953.5 billion by 2026 and could reach as much as $4.38 trillion by 2033.

For Absa, the push places a traditional African banking group inside a market increasingly moving toward institutional-grade infrastructure for digital assets, while allowing it to build the service around regulatory requirements in each market where it expands.