Crypto custodians are expanding their services, attracting more institutional investors into the digital asset space, according to a report from digital asset research firm Ccdata. This report, sponsored by Zodia Custody—a collaboration between Standard Chartered, Northern Trust, and SBI—highlights the changing role of crypto custodians in connecting traditional and digital finance.
These custodians are making the crypto world more accessible to institutional players, facilitating a smoother transition between conventional and digital financial landscapes.
One of the important services introduced is staking. This allows institutions to use their crypto assets to validate transactions on proof-of-stake networks such as Ethereum or Solana. The report suggests that the $20 billion staking sector is ready for a substantial injection of institutional capital. Custodians are essential in making this possible for investors who are not native to these networks.
Additionally, the tokenization of real-world assets (RWAs) is a rapidly growing industry. Custodians are teaming up with startups to offer RWA-related services. This industry has grown ten times larger since the beginning of the year and is expected to reach a massive $4 trillion by 2030, according to a report from Citi. Custodians play a crucial role in issuing, managing, and distributing these tokenized assets, creating a transparent ecosystem for institutions.
The report highlights the use of institutional-focused products such as trusts and exchange-traded products (ETPs), which held more than $35 billion in assets as of August. The ongoing conversation about the potential introduction of a spot Bitcoin exchange-traded fund (ETF) in the U.S. has the potential to shake up the industry, opening the door to the development of new investment products.
The data shows that more and more people are getting into cryptocurrency, with around 1.5 billion individual Bitcoin and Ethereum wallets out there. This is quite different from the approximately 100 companies that handle crypto for institutions and regular people. It means there's a big chance for these companies to serve the expanding customer base, and they should be ready to adapt to new trends in the industry quickly.
In conclusion, the Ccdata report shows how crypto custodians are being proactive in keeping up with the fast-moving crypto industry. They are expanding their services by adding staking, RWA tokenization, and new investment products. This way, crypto custodians are establishing a unique position for themselves and playing a crucial role in introducing institutions to the world of cryptocurrencies.
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