Are crypto custodians the new banks for institutions?

in cryptocurrency •  last year  (edited)

BitGo, CoinBase and Goldman Sachs have announced their intention to open crypto custody, a service in high demand for institutions.

In crypto, you're in control of your assets.

Exit account freezing, consumer limits or unplanned inflation (at least with Bitcoin).

While it is one of cryptocurrency's core value proposition (to keep control over one's asset), it also creates a huge barrier for mainstream adoption.

For instance, managing private keys is definitely confusing for the less tech-savvy: sending coins to the wrong address or losing access to private keys always results in loss of assets.

This environment does not meet the financial needs of the mainstream population, as it comes with a steep learning curve, change of behaviour and extra care.

In the last few months, cryptocurrency custody has emerged as the hottest financial service market, especially for institutions. Let's dig in.![]

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To the question in your title, my Magic 8-Ball says:

Signs point to yes

Hi! I'm a bot, and this answer was posted automatically. Check this post out for more information.

Custodianship of crytpos should be considered in 2 different ways:

  1. Are the custodians simply minding your private keys for you? or
  2. Are your cryptos held in a similar way bank deposits are held today by financial institutions?

I have written a post on my steemit blog about this...