Cryptocurrency-Focused Custodial Services Are Growing Around the World for Bitcoin Investors
The number of businesses and companies that are starting to offer crypto-related custody solutions continues to grow. The solutions will be allowing large investors and institutions to keep their assets protected without having to be worried about it.
As reported by News.Bitcoin.com, the number of crypto custody solutions being launched is currently growing. The services that these institutions provide will help companies and larger investors to have their assets safeguarded with a respected and trusted third party.
As per the Bank of New York Mellon, companies are starting to develop these solutions because there is a growing demand in the market. There are some analysts that believe that this is a very important step for the digital asset market since it would be allowing an increasing number of institutions to start investing in cryptocurrencies.
A few weeks ago, the Swiss bank Vontobel launched a ‘Digital Asset Vault’ that would allow clients to issue instructions for the purchase and custody of cryptocurrencies. At the same time, the German stock exchange Börse Stuttgart launched a crypto custody service as well. Other companies in the market developing these custodial services are Fidelity and Coinbase, among others.
There are several regulatory agencies, including in the United States and the European Union, that have raised different issues regarding the custody of digital assets. This situation makes it difficult to start applying custodial requirements to virtual currencies. Indeed, there is no specific definition of how to keep the ownership of securities.
The CEO of the virtual currency wallet Edge, Paul Puey, commented that there has been a rapid increase in custody solutions around the world. Additionally, he mentioned that the trend is limited to just the financial world.
About it, Mr. Puey commented:
“This would be aking to 1990s internet companies filing for telephone regulations to build VOIP solutions to replace phone carriers. Nothing very disruptive would come from that. Crypto is unique and powerful because custodians aren’t needed to hold digital value. We can replace institutional crypto investors with non-custodial apps that hold the money for users.”
In the future, regulations will play an important role in driving compliance efforts to crypto exchanges in the market. The U.S. Securities and Exchange Commission (SEC) is going be participating actively in trying to regulate the market in the United States. Michael Ou, the CEO of Coolbitx, explained that KYC and AML compliance is something that requires time and resources for companies.
In the future, as the market becomes more mature the division of labour in the market will be more notorious. Thus, exchanges will be working with companies specializing in custody. That means that the crypto custodial industry could start to grow in the future and make the market much more efficient and safe.