Facing Digital Asset Custody Providers
Digital asset custody services are an emerging industry, and most banks are just starting to offer them. However, BBVA, Nomura, Shinhan Bank, and others are already active. The market for these services is still in the early stages and will likely continue to grow in the coming years. Still, there are challenges facing these providers. In addition to regulatory uncertainty, many new providers are still figuring out what structures and controls work in the market.
Institutional investors and retail investors alike will need safe storage for digital assets. These investors are likely to be holding millions, or even billions of dollars, so they will need a reliable solution. In the last few years, more than $1 billion has been invested in digital asset custody providers. Large banks must decide whether to build their own core technologies, license Advanced MPC, or integrate with third-party providers to provide digital asset custody services quickly and easily.
Integration between digital asset custody providers is the natural evolution of the industry. As a result of increased regulatory clarity and demand from clients, the industry is poised for an upsurge. For banks and other client firms, building a trusted sub-custodian relationship with a leading digital asset sub-custodian is often a better option than building an in-house digital asset service.
Digital asset custody services provide institutional clients with secure and regulated custody services. Institutional clients can rely on these services, which are designed by financial and security experts. They are also independently audited by independent third-party firms. While this industry is still in its early stages, many banks are stepping up to provide this service.
Challenges Facing Digital Asset Custody Providers
Many banks are exploring a crypto custody service, including JPMorgan, Citi, and Goldman Sachs. Although these banks haven’t gotten started with this service, they’re confident that there will be demand at some point. Companies like Northern Trust and Fidelity have already begun offering custody services to crypto startups.
Digital asset custody services are becoming increasingly important as traditional assets migrate to blockchain technology. This industry needs a high level of security and compliance, and digital asset custody is a key part of the solution. However, there are also risks associated with digital asset custody. A secure digital asset custody provider should offer a high level of privacy and transparency, as well as comprehensive security measures.
Custody services are essential for institutions managing large sums of money. Without proper custody solutions, institutional investors will be hesitant to invest in the space. But as demand for digital asset custody solutions grows, more companies are stepping in to fill the gap. This will lead to a larger supply of Digital Asset custody services.