Definition ∞ A tokenized custody platform is a system that holds digital assets and represents their ownership through on-chain tokens. These platforms provide secure storage for cryptocurrencies and other digital assets, issuing a corresponding token to the asset owner that serves as a verifiable claim to the underlying held asset. This tokenization allows for easier transfer, fractional ownership, and integration with decentralized finance (DeFi) applications while the actual assets remain in a professionally managed, often cold storage, environment. It bridges traditional custody with blockchain utility.
Context ∞ Tokenized custody platforms are gaining prominence in the digital asset space, particularly as institutional interest in cryptocurrencies grows. News often highlights the security measures employed by these platforms and their role in enabling broader participation in DeFi without direct management of private keys. The regulatory landscape surrounding these platforms is also a key discussion point, focusing on investor protection and asset segregation.
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