Custody modernization refers to updating methods for securing and managing assets. This involves implementing advanced technological solutions and procedural changes to enhance the safety, accessibility, and efficiency of asset storage, particularly for digital assets. It addresses challenges such as cryptographic key management, multi-signature schemes, and hardware security modules. The objective is to align custodial practices with evolving digital asset landscapes and regulatory requirements.
Context
The financial industry is currently addressing custody modernization to accommodate the unique requirements of digital assets and distributed ledger technology. Institutions seek solutions that balance robust security protocols with operational scalability and regulatory compliance. Debates persist regarding the optimal balance between self-custody and third-party institutional custody for various digital asset classes. Future developments will likely involve further integration of decentralized technologies and enhanced interoperability across custodial platforms.
New US stablecoin legislation and agency policy shifts redefine digital asset classification, demanding updated compliance frameworks for market participants.
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