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Crypto Firms Target Custody Market as Institutional Adoption Grows — TradingView News
Storing digital assets for institutional clients is the next focus of crypto companies in North America, driven by the fusion of traditional financial products with cryptocurrencies. Taurus and Fireblocks are two of the latest infrastructure providers looking to expand their custody business in the region.
On May 21, Switzerland-based Taurus announced an office in Vancouver, British Columbia, Canada, “in response to growing demand” for tokenization and custody services. Further expansions await “the completion of a number of pending deals,” Lamine Brahimi, co-founder and managing partner of Taurus, told Cointelegraph.
The same trend is pushing Fireblocks to launch a limited purpose trust company regulated by the New York Department of Financial Services (NYDFS). “It is increasingly clear that there is a lack of qualified custodians covering digital assets in the United States,” said Adam Levine, senior vice president of business development at Fireblocks.
Upon approval, the future Fireblocks company will be dedicated to registered investment advisors, asset managers, venture capitalists and exchange-traded fund providers – a growing audience among cryptocurrency holders since the approval of US spot Bitcoin exchange-traded funds in January.
“The current regulatory framework in the United States has significantly influenced the willingness of traditional custodians to enter this market. As a result, there are limited options for some market participants to keep their digital assets in custody through a qualified custodian,” Levine explained.
Related: Tokenization to unlock interoperability between payments and investments
In accordance with the NYDFS pre-approved token or “green list,” Fireblocks’ custodian arm will initially offer Bitcoin custody BitcoinUSDEther 
The cryptocurrency custody market has seen significant growth and is poised to expand further. In 2022, the digital asset custody market reached $448 billion, fueled by the need to safeguard investments from security breaches and comply with regulatory requirements.
Along with traditional cryptocurrency operators that offer custody to institutional clients, such as Ripple, Kraken and Coinbase, the industry has seen traditional firms seeking a slice of cryptocurrency-related revenue.
HSBC, for example, announced plans to launch a digital asset custody platform for institutional investors, focusing on tokenized securities. In 2022, BNY Mellon, considered America’s oldest bank, launched a digital custody platform to safeguard crypto assets for select institutional clients.
Custody of digital assets typically involves a combination of cold storage (offline), hot storage (online), multi-signature wallets, and multi-party computation to ensure asset security. Ripple predicts that the institutional cryptocurrency custody market could reach nearly $10 trillion by 2030.
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