Definition ∞ A custodial services agreement is a formal contract where a financial entity agrees to hold and safeguard assets on behalf of a client. This document details the responsibilities of the custodian, including asset protection, record-keeping, and transaction execution. It outlines the terms under which assets are managed and transferred. Such agreements are fundamental for asset security and client confidence.
Context ∞ For institutional participation in digital asset markets, robust custodial services agreements are essential for addressing security concerns and regulatory requirements. These agreements specify how private keys are managed and how digital assets are protected from theft or loss. The clarity and strength of these contracts are paramount for market adoption and investor assurance.
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