Trust Bank Model

Definition ∞ Trust Bank Model describes a financial operating structure where a regulated trust company or bank acts as a custodian for digital assets within an investment vehicle. In this model, the trust bank holds the actual cryptocurrency, ensuring secure storage and compliance with regulatory requirements. This structure provides a layer of institutional oversight and asset protection.
Context ∞ The Trust Bank Model is fundamental for the operation of regulated cryptocurrency investment products, such as spot Bitcoin ETFs, offering investors enhanced security and compliance. A key discussion involves the specific operational procedures and security measures employed by these trust banks to safeguard digital assets. Future developments will likely see more traditional financial institutions offering similar custodial services for a wider array of digital assets.