Crypto custody market needs more regulatory clarity – survey

Bitcoin SmallThe growing crypto-custody market still has some way to go before it is fully trusted by asset managers and owners, suggests recently published research.

Almost half (49%) of institutional buy-side firms choose to self-custody at least some of their digital assets rather than entrust their safekeeping to a third-party crypto custodian, according to the survey conducted by benchmarking company Coalition Greenwich.

The most popular option is a cold wallet/hardware-style solution. However, Coalition Greenwich states that as the crypto custody market matures, institutions are likely to make "more conservative and institutionally-friendly choices".

The primary driver for the use of self-custody is the mix of crypto assets, states the survey, based on the fact that even the longest-serving crypto custodians are unable to cover the full range of digital assets in circulation.

Another impediment to the wider use of crypto custodians is the lack of regulatory clarity, states the survey. While 62% of institutional buy-side firms say that it is important that a crypto custodian is fully regulated, only 35% claim to know what it means for a custodian to be fully qualified.

This suggests that more education, clarity and outreach are required to "move digital asset custody forward", states Coalition Greenwich.

The survey canvassed 200 buy and sell-side participants across North America, EMEA and Asia Pacific.

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