Crypto Custodians Expanding Their Services
A recent report by Ccdata, a digital asset-focused research firm, reveals that crypto custodians are evolving and introducing new services for their institutional clients. These services include staking, custody of tokenized real-world assets (RWA), and investment product-related opportunities.
The Changing Landscape of Crypto Custodians
The report, commissioned by Zodia Custody and published by Ccdata, discusses the transformation of custodians in the digital asset industry. It highlights how custodians are expanding their offerings to cater to the growing demand from institutional investors.
Current State of Crypto Custodians
While there are close to 1.5 billion unique Bitcoin and Ethereum wallets, there are only around 100 custodians serving institutional and retail customers. This indicates the potential for significant growth in the crypto asset market.
Adapting to Industry Changes
Ccdata emphasizes that custodians need to be agile and responsive to innovative changes within the cryptocurrency industry in order to attract institutions. The report explores various use cases where custodians are adapting their services to meet the needs of institutional clients.
Staking Services
One of the new services offered by crypto custodians is staking. This allows institutional customers to use their crypto assets for validating transactions on proof-of-stake networks like Ethereum or Solana. The report predicts that institutional capital will dominate this $20 billion field in the future, requiring custodians’ operational assistance.
Tokenization of Real-World Assets (RWA)
The tokenization of real-world assets (RWA) is another emerging use case for crypto custodians. This industry has grown significantly in 2021 and is projected to reach $4 trillion by 2030, according to a Citi report. Custodians are partnering with startups to provide transparent management and distribution of tokenized RWA for institutional clients.
Institutional-Oriented Investment Products
Crypto custodians are also supporting institutional-oriented investment products such as trusts and exchange-traded products (ETPs). These products have maintained over $35 billion in assets during August. The report suggests that the potential launch of a spot Bitcoin exchange-traded fund (ETF) in the U.S. could further expand the scope for creating new investment opportunities.
Hot Take: Expanding Crypto Custodian Services for Institutional Clients
The report highlights the evolving role of crypto custodians as they introduce new services to cater to institutional clients. With the growing adoption of crypto assets, custodians need to adapt quickly to industry changes. Staking services, tokenized real-world assets custody, and investment product-related opportunities are among the key areas where custodians are expanding their offerings. By providing these services, custodians aim to attract more institutions and facilitate their participation in the cryptocurrency world. As the industry continues to evolve, custodians play a crucial role in enabling institutions to leverage the full potential of digital assets.
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