As digital assets continue their march towards mainstream finance, institutional crypto custody services are becoming mission-critical offerings for banks looking to remain competitive.
The ability to securely store, manage and safeguard crypto assets and tokenized assets will determine whether banks are able to meet rising demand for new asset classes and position themselves at the forefront of this $20 trillion market opportunity.
Amidst this shift, Ripple’s new Digital Asset Custody: Quick Guide for Banks provides a blueprint for evaluating and deploying institutional-grade custody infrastructure to build trust, drive growth and unlock new revenue streams.
The Digital Custodian Opportunity
Digital asset adoption is growing at a fever pitch because the inherent advantages enterprise blockchain affords — speed, transparency, immutability — can help improve costs, reduce fraud and boost liquidity across a wide range of finance use cases.
According to an EY-Parthenon study, 64% of retail investors already hold digital assets, while another 69% plan to increase investment over the next two to three years. Overall, up to 10% of all financial assets are expected to be tokenized by 2030.
For financial institutions eager to carve out their share of this market, leveraging a highly secure, bank-grade solution for accessing and managing digital assets is a must.
Many large, global banks already offer traditional custodian services for financial assets, but must now extend their offering to include institutional digital asset custody or risk being overtaken by competitors. At the same time, regional banks can deploy new digital asset solutions to compete with neobanks and capitalize on growing opportunities in regions with progressive crypto regulatory frameworks.
Driving Revenue from Enterprise Blockchain Use Cases
Banks offering digital asset custody solutions, or what PwC calls “the foundation of any digital asset business”, are well positioned to serve the core custody needs of a range of retail and institutional clients.
This includes institutional investors—from hedge funds and asset managers to family offices—who require secure and compliant solutions for managing large portfolios of digital assets, including tokenized real-world assets like securities, real estate or even carbon credits. And by integrating digital asset custody with existing banking services, such as portfolio management or payments, banks can offer those same institutional investors a seamless experience across a variety of use cases and asset classes.
Banks can also use Ripple Custody to ensure their services are compliant with stringent regulatory frameworks across regions. For example, in jurisdictions like Hong Kong and Japan, recent government regulations now require providers to keep a certain percentage of customers’ assets in cold storage.
Beyond these core services, banks that leverage Ripple Custody maintain full control over their operating and security models — including flexible deployment or private key management — which can also bring a host of innovative new use cases to market.
These include institutional custody services that facilitate access to a tokenized securities registry platform, sub-custody networks for global service coverage, or the elimination of manual reconciliation. By tapping into digital asset custody infrastructure in tandem with tokenization, banks can also support the issuance and custody of commodity-backed tokens for direct investments in arenas like gold and rare metals.
Proven, Trusted Solutions
Ripple Custody provides banks with all of these advantages and more through a single, fully integrated platform for all digital asset use cases. Its institutional-grade custody infrastructure is secure, scalable and highly customizable to accommodate a wide range of applications.
Today, Ripple Custody serves financial institution customers across more than 15 countries, supporting the secure transfer and settlement of digital assets, tokenization and management of real-world assets. Time and again, Ripple Custody has proven to reduce costs, enhance security, and amplify operational efficiency.
As the world continues to embrace digital assets, the need for banks to support their clients’ custody needs will only grow. Download Ripple’s complete Digital Asset Custody: Quick Guide for Banks to learn how to stay ahead of the competition and expand revenue opportunities with robust custody solutions that sidestep the cost and burden of in-house development.
