Custody and Clearing

Definition ∞ Custody involves securely holding assets, while clearing finalizes transactions between parties. Custody refers to the safekeeping and management of digital assets on behalf of clients, typically by specialized service providers, mitigating risks of theft or loss. Clearing involves the process of verifying and settling transactions, ensuring that funds and assets are correctly transferred between buyer and seller, and that obligations are met. Both functions are fundamental to the integrity and efficiency of digital asset markets, particularly for institutional participation.
Context ∞ In crypto news, discussions around custody and clearing frequently relate to the entry of institutional investors into digital asset markets, requiring robust, regulated solutions. Debates often focus on the trade-offs between centralized custodial services offering greater security assurances and decentralized alternatives promoting user control. Regulatory bodies are increasingly scrutinizing these services to establish clear standards for consumer protection and financial stability, influencing future market infrastructure.