Third-party custodians are external entities that hold and manage digital assets on behalf of individuals or institutions. These service providers offer secure storage solutions, often employing advanced security measures like multi-signature wallets, hardware security modules, and insurance. They assume the responsibility for safeguarding private keys and executing transactions as instructed by their clients. Their services are crucial for institutional participation in the digital asset market.
Context
The role and regulation of third-party custodians are increasingly central to the maturation and institutional adoption of digital assets. News often reports on new custody solutions, security breaches, and regulatory clarity surrounding these services. The ongoing challenge involves balancing robust security with accessibility and regulatory compliance in a rapidly changing environment.
The UK's new stablecoin framework mandates full asset segregation and par redemption, fundamentally re-architecting issuer balance sheets and custody risk models.
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