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.
Institutional Custody in Crypto
Binance Research (Mac Naggar)
May 26th, 2023