- Institutions are increasingly demanding exposure to the crypto asset class.
- By employing security, operational, and legal best practices, institutional custodians provide the peace of mind many institutions require to make an initial leap into crypto.
- There are three classifications of institutional custodians: custodians, custodial technology providers, and hybrid custodians.
- Unlike exchanges, institutional custodians are, first and foremost, focused on optimizing for asset security and protection.
- Institutional custodians are redefining what it means to be a crypto custodian by offering new, innovative custody solutions.
- Furthermore, institutional custodian offerings are not limited to custody but also include trading, staking, insurance, audit, escrow, accounting, and research offerings.
- Off-exchange settlement (“OES”) is a novel institutional custody offering that allows institutions to trade crypto assets at a convenience level similar to if their assets were on an exchange, without actually being on an exchange.
- Institutional custodians are evolving to provide similar offerings as prime brokerages.
- Crypto custody regulations are in their nascent stages but becoming clearer.
- Traditional financial custodians are beginning to enter the crypto custody space to compete with crypto-native custodians.
