CONNECT TO DIGITAL ASSET CUSTODY, WHERE AND WHEN YOU NEED IT. ALWAYS UTILIZE THE NEWEST TECHNOLOGIES AND AVOID VENDOR LOCK-IN THROUGH A GLOBAL CUSTODIAN NETWORK. SCALE YOUR CUSTODY OPERATIONS QUICKLY AND HAVE CONTROL OVER ALL OF YOUR FUNDS VIA THE ASSET PANEL.
Utilize Custody Services within different jurisdictions
Flexibility scaling from Cloud (testing the waters) to On-Premise (fully investing)
Utilizing different features, hot, warm, cold
Have everything in one place via the asset panel
Avoid vendor lock-in
As institutional interest in digital assets is rapidly increasing, the list of different custody providers keeps growing. While the first qualified custodians received their license no more than 2 years ago, there have been numerous custody providers founded in the last years to match the increased market demand. Hence, the market remains rather immature and fragmented since most custody providers are trying to establish themselves somewhere in the young and emerging market. As traditional players are entering the digital asset market they are left with many decisions on which custodian to choose. However, due to the rapid evolution of the digital asset custody ecosystem, it is becoming increasingly difficult for everyone to decide on the most effective current custody solution and its corresponding technology. Based on this characteristic of the custody market, firms looking to enter the digital asset field should avoid being stuck with one custody provider and rather connect to the custody ecosystem as a whole. This way they can simply choose where and when they need custody solutions and quickly scale or move their digital assets under custody between different providers. Especially for market participants that are new to the digital asset field, the ability to flexibly scale their investments in custodians and different solutions is highly important. With cloud-based solutions being far less expensive than on-premise ones, institutional holders might decide that they’d prefer to test the cheaper cloud-based solutions before deciding on an on-prem solution that requires significant up-front investments. Additionally, the demand from clients could necessitate various solutions that one custodian could either not fulfill or simply does not offer. Leaving the manager with the task to look for another custodian or without the option to directly satisfy their client’s demands.
Due to different regulations and geographical variations, digital asset custodians are now located in various hubs all over the world. Additionally, due to the non-physical nature of digital asset custody, many holders who are looking for a custody provider are not always located in the same country or jurisdictional region. This can be both an opportunity and a burden to institutional Bitcoin investors, as most countries are operating under their own legal regulations and demand different levels of compliance. Imagine for example an investment firm that serves investors from all over the world. These investors might all have different legal requirements for their wallet management, as some countries might demand clients over a certain investment amount to deliver financial records, insurance contracts, or licensed certificates. To comply with all jurisdictions, it is necessary for the investment firm to quickly move funds between custodians that are located in different legal regions. This can already be done at the beginning of the choice of a custody provider, as a restrictive selection could only be shown to restrain the user from moving their funds to a custody provider outside of their compliant jurisdiction.
Together with custody services from different jurisdictions, a network of custodians also brings the ability to utilize all different wallet features such as hot and cold wallets or MPC and HSM technologies. The number of funds that are being actively traded and therefore require a wallet connected to the internet varies for every holder, making every firm unique in regards to their custody needs. While being locked in with a single custody provider, companies might not have the chance to move funds quickly from hot to cold storage with the confidence of having both funds in the most secure and efficient custody solution. One custodian might prove to be the perfect partner for highly secure HSM solutions that guard large funds located in cold wallets, while another provider is experimenting with newer MPC technologies that enable quick and secure movement of smaller and actively used funds. Connecting to custody means always utilizing the service that is right for every pool of capital.
Additionally, as an investment firm, it is crucial to maintain an overview of all current funds and assets under management. When all of the assets are secured in different wallets and with various custodians, it can become increasingly difficult to have a complete overview of all funds. This is why DECUS offers an asset panel that functions as a dashboard to view all transactions, price changes, and wallets in one single place. Within the asset panel, it is simple to open both active and custodial wallets with every custody provider and access exchanges all in one interface.
Finally, it is important to stress the most valuable aspect of being connected to custody rather than selecting one custodian. Whenever you are choosing one custodian, you are vulnerable to the next market developments that might alter your opinion on which custodian offers the best service for your company. This means that you always have to be searching the market for the most secure and sophisticated solution at the best price. By choosing not one custodian but a network that is constantly evolving, you will never have to worry about missing out on new technological advances again. Within a network of custodians, you can sleep well while knowing that you will never experience a vendor lock-in situation at a custodian who is using outdated technology.