Custody Agreement

Definition ∞ A custody agreement is a formal contractual arrangement that outlines the terms under which one party holds and safeguards digital assets on behalf of another. This document specifies the responsibilities related to security, access protocols, and the management of the assets. It establishes a legal framework for the secure holding of cryptocurrencies.
Context ∞ Institutional participation in the digital asset space relies significantly on robust custody agreements to manage security risks and ensure regulatory compliance. News frequently covers the establishment of new custody solutions or changes in existing agreements, reflecting the evolving standards for asset protection. These agreements are vital for building trust and stability in the digital asset ecosystem.