Crypto Firms Eye Custody Market Amid Institutional Growth
3 min read
Crypto Firms Eye Custody Market Amid Institutional Growth
Institutional storage of digital assets is becoming the new battleground for crypto firms in North America, sparked by the convergence of traditional financial products and cryptocurrencies. Taurus and Fireblocks are among the latest infrastructure providers seeking to bolster their custodial services in this region. On May 21, Taurus, a company headquartered in Switzerland, made public its opening of an office in Vancouver, British Columbia, Canada. This expansion aims to meet the rising demand for tokenization and custody services. Lamine Brahimi, Taurus’ co-founder and managing partner, indicated that further expansions are contingent on a number of imminent deals.
The movement towards institutional digital asset storage has also encouraged Fireblocks to establish a limited-purpose trust company regulated by the New York Department of Financial Services (NYDFS). Adam Levine, who serves as the senior vice president of corporate development at Fireblocks, noted the clear absence of qualified custodians handling digital assets in the U.S. Once they get the necessary approvals, Fireblocks intends for its new entity to cater to registered investment advisers, asset managers, venture capitalists, and exchange-traded fund (ETF) providers. This audience is expanding, particularly following the green light for U.S. spot Bitcoin ETFs in January.
Levine pointed out that the current regulatory environment in the U.S. has dissuaded traditional custodians from significantly entering the digital assets market, leaving market participants with limited custodial options for their digital assets. To prioritize security and compliance, Fireblocks’ custodian services will initially cover Bitcoin, Ether, and three stablecoins, in line with the NYDFS preapproved token list. More assets will be added based on regulatory requirements.
The expanding crypto custody market mirrors the significant growth in demand for secure storage solutions. In 2022, the value of the digital asset custody market surged to $448 billion. This upward trend has been driven by the necessity to protect investments from security breaches and adhere to regulatory standards. Traditional crypto companies like Ripple, Kraken, and Coinbase have been instrumental in providing custody services to institutional clients. More recently, traditional financial firms have also begun seeking entry into this lucrative space.
For example, HSBC is gearing up to roll out a digital asset custody platform tailored for institutional investors, aimed particularly at tokenized securities. On a similar note, BNY Mellon, America’s oldest bank, launched its own digital custody platform last year to safeguard crypto assets for select institutional clients.
Digital asset custody often involves multiple layers of security to ensure asset protection. This includes cold storage (offline), hot storage (online), multisignature wallets, and multiparty computation techniques. Such comprehensive security measures are essential to maintain the trust of institutional stakeholders.
Ripple estimates that the institutional crypto custody market could skyrocket, potentially reaching nearly $10 trillion by 2030. This projection underscores the enormous potential and growing interest in secure digital asset storage solutions within the institutional investment community.
As the sector continues to evolve, both traditional financial firms and dedicated crypto companies are likely to innovate and compete fiercely to offer the most secure, compliant, and customer-friendly custodial services. This burgeoning market is expected to attract more players, further diversifying and strengthening the digital asset storage landscape.
billion in 2022? That’s a lot of money. All the more reason for hackers to get smarter and more aggressive. This is not reassuring.
Great to see that the focus remains on compliance and security. That’s the only way to grow trust in the industry!
Seeing these developments is super reassuring. Institutional investors need robust, secure solutions, and that’s exactly what Taurus and Fireblocks are providing!
Fireblocks establishing a trust company regulated by NYDFS is a huge step forward! Secure and compliant custodial services are the future!
Taurus and Fireblocks bolstering their services in North America is a massive win for the industry! 🥇📉
All these layers of security yet breaches keep happening. Multisignature wallets and offline storage won’t mean a thing if the system itself is flawed.
The regulatory environment might be tough, but with companies like Fireblocks navigating it, we’re in good hands!
I’m skeptical about how secure these new custodial services will actually be. Crypto’s been hacked way too many times to trust these new players.
Fireblocks expanding its offerings under NYDFS regulation is just what the U.S. market needed. Cheers to more secure investments! 🥳🇺🇸
So cool seeing Taurus open up shop in Vancouver! Can’t wait to see how they shake things up!
Traditional financial firms entering the digital space is exhilarating to watch! More competitors mean better services!
This expansion into North America is a game changer! Taurus and Fireblocks are setting new standards in crypto custody! 🌟🔐
The convergence of traditional finance and crypto is creating endless opportunities. Exciting times ahead thanks to Taurus and Fireblocks! 💼💸
Institutional storage of digital assets is heating up! With players like Taurus and Fireblocks, the future looks bright!
More firms getting into crypto custody just means more targets for hackers. The bigger they are, the harder they fall.
Super exciting to see how the custodial services for digital assets are evolving! Taurus and Fireblocks are definitely on the right track!
Covering Bitcoin, Ether, and stablecoins initially is a smart move. Step by step to a more secure future!
Great, now even non-crypto traditional financial institutions are going to fight over digital assets. Talk about a rat race.
Did anyone else notice how adamantly they’re pushing security? If they were actually secure, they wouldn’t need to keep emphasizing it. Feels like overcompensation to me.
Institutional crypto custody could hit $10 trillion by 2030? Mind-blowing potential!
Digital asset custody, especially with the security measures mentioned, is absolutely crucial for the sector’s growth!
Fireblocks’ move to cater specifically to investment advisers and asset managers is brilliant! A much-needed service!
HSBC and BNY Mellon stepping into the digital asset arena? Thats huge! Traditional and crypto firms innovating together is fantastic!