Custody service providers are entities that securely store and manage digital assets on behalf of clients. These providers offer specialized solutions for holding private keys and cryptoassets, employing advanced security measures like cold storage, multi-signature schemes, and insurance policies. They cater primarily to institutional investors, corporations, and high-net-worth individuals requiring secure, compliant, and often regulated storage options. Their services mitigate the risks associated with self-custody.
Context
Custody service providers are currently experiencing significant growth as institutional participation in digital asset markets expands. A key discussion centers on regulatory clarity and the licensing requirements for these entities across different jurisdictions. A critical future development involves the integration of custody solutions with broader decentralized finance platforms, while maintaining institutional-grade security and compliance.
The FCA's proposed framework mandates full stablecoin backing and asset segregation, fundamentally resetting UK operational and reserve requirements for issuers.
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