The Crypto Roundup: 22 May 2024 | CryptoCompare.com

Established financial institutions and cryptocurrency firms have set their sights on the digital assets custody market for institutional investors, in a trend fueled by the rise of institutional investment in the space after the launch of spot Bitcoin exchange-traded funds in the US.

Two infrastructure providers, Taurus and Fireblocks, are at the forefront of this expansion. Taurus, a Swiss company, recently announced the opening of an office in Vancouver, Canada, citing “growing demand” for tokenization and custody services, with its co-founder noting further expansion is contingent on “a number of pending deals.”

Fireblocks, another player in the space, is seeking to establish a limited-purpose trust company regulated by the New York Department of Financial Services (NYDFS), with the company seeing a “lack of qualified custodians in the United States covering digital assets.”

Regulatory hurdles are seen as a key factor limiting the number of traditional custodians entering the market, and Fireblocks’ firm is set to be dedicated to registered investment advisers, asset managers, venture capitalists and exchange-traded fund providers.

The firm will just offer custody of Bitcoin, Ether, and three stablecoins initially, in accordance with the NYDFS’ preapproved token “green list.” It comes as the crypto custody market grows significantly, having reached $448 billion in 2022.

Established crypto players including Ripple, Kraken, and Coinbase are already offering crypto custody services to institutional clients, but traditional financial institutions are also taking notice. HSBC, for example, has announced plans for a digital asset custody platform focused on tokenized securities, while BNY Mellon, the nation’s oldest bank, launched a similar platform in 2022 to cater to institutional clients.

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• Source: https://www.cryptocompare.com/email-updates/daily/2024/may/22/