Custodial Solutions Are Latest Innovation In Cryptocurrency

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By : Rachel Wolfson


Custody solutions (products offered by third party providers of storage and security services for cryptocurrencies) have become the latest innovation to emerge from the cryptocurrency ecosystem. The introduction of custodianship is expected to herald the entry of institutional capital into the industry, acting as the missing link investors and fund managers have been seeking for entrance into the crypto market.

The largest U.S. cryptocurrency operator, Coinbase, estimates $20 billion worth of crypto is sidelined until custody solutions make sense. Sam McIngvale, who’s leading the Coinbase Custody project, believes that crypto assets will flow into custody services once they become readily available.

“Coinbase Custody’s mission is to make digital currency investment accessible to every eligible financial institution and hedge fund in the world,” McIngvale wrote in a Coinbase blog post.


This past June, Coinbase announced its Coinbase Custody product upon completion of their first successful deposit. The product is essentially Coinbase’s proprietary cold storage-as-a-service, wrapped in a regulated entity with robust insurance and additional client services.

It was also announced last week that the multinational investment bank, Citigroup, will offer crypto custody solutions to institutional investors. Citigroup launched a product called “Digital Asset Receipt” (DAR), which is intended for institutional investors to securely invest in cryptocurrencies in a fully regulated and secure manner.