North American Crypto Firms Set Sights on Institutional Digital Asset Custody Expansion
Summary:
Crypto firms in North America, like Taurus and Fireblocks, are extending their custodial operations to include digital asset storage for institutional clients. Motivated by the blending of standard financial products with cryptocurrencies and a noticeable shortage of competent custodians, these companies aim to fill the gap. In response to the growing demand, Taurus has opened an office in Vancouver, and Fireblocks is launching a trust company. The market for digital asset custody, which has witnessed significant growth, is expected to continue expanding, potentially reaching $10 trillion by 2030.
Crypto firms in North America are setting their sights on digital asset storage for institutional clients, merging conventional financial products with cryptocurrencies. Infrastructure providers Fireblocks and Taurus are among recent companies planning to extend their custodial operations in the region. On May 21, Taurus, based in Switzerland, revealed the opening of a Vancouver office in response to increased demand for custody and tokenization services. Co-founder of Taurus, Lamine Brahimi, indicated that more expansions are on the horizon once several deals in process are finalized.
A similar trajectory is leading Fireblocks to introduce a limited-purpose trust entity, regulated by the New York Department of Financial Services (NYDFS). Fireblocks' SVP of Corporate Development, Adam Levine, pointed out a notable shortage of competent custodians for digital assets within the U.S.
Should they receive approval, Fireblock's planned company will cater to registered investment advisers, asset managers, venture capitalists, and ETF providers – an expanding group among crypto investors following January's sanction for U.S. spot Bitcoin ETFs. Levine explained that the existing U.S. regulatory landscape has deterred classic custodians from emerging into the market, leaving minimal choices for market players seeking a qualified custodian to secure their digital assets.
Aligned with the NYDFS preapproved tokens or "green list," Fireblocks' custodian branch will begin with the custody of Bitcoin (BTC), Ether (ETH), and three stablecoins. Additional assets will be added based on regulator stipulations.
The crypto custody market has been growing considerably and is prepared for further expansion. In 2022, the digital asset custody market stood at $448 billion, propelled by the necessity to protect investments from security breaches and fulfill regulatory demands. Apart from crypto-centric entities such as Kraken, Ripple and Coinbase that offer custody for their institutional clientele, conventional firms are also stepping in to capitalize on crypto's potential profit.
HSBC, for example, intends to roll out a digital asset custody platform for institutional investors concentrating on tokenized securities. Furthermore, BNY Mellon – America's oldest bank – initiated a digital custody platform in 2022 to secure crypto assets for selected institutional clients. Digital asset custody typically applies a mix of cold (offline) and hot (online) storage, multisignature wallets, plus multiparty computations to maintain asset safety. Projections from Ripple suggest that the institutional crypto custody market might approach a sizable $10 trillion by the year 2030.
Published At
5/21/2024 3:00:00 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.