Custody of Assets

Definition ∞ Custody of assets involves the safekeeping and management of digital holdings on behalf of an owner. This responsibility entails securing private keys and ensuring the availability and integrity of digital currencies or tokens. Custodial solutions can range from self-custody, where individuals retain full control, to third-party custody providers offering institutional-grade security and operational frameworks. The method chosen significantly impacts security, accessibility, and the level of trust required in external entities.
Context ∞ News in the crypto space frequently addresses the varying approaches to asset custody, particularly following security breaches or regulatory announcements. Debates often focus on the trade-offs between centralized custodial services, which offer convenience but introduce counterparty risk, and decentralized self-custody, which demands greater user responsibility. Future developments include advancements in multi-party computation and hardware security modules to enhance both custodial and non-custodial solutions.