The digital asset economy is a fast-growing ecosystem, with new use cases rapidly emerging across financial services and an increasing number of institutional investors. From Citi to HSBC, there is clear consensus that tokenization and digital assets will be trillion dollar markets defining the future of finance.
Crypto exchanges are at the heart of this, helping to move and manage digital assets around the world. To remain competitive as the industry matures, these companies must integrate reliable, compliance-focused cross border payment and custody solutions that meet increasingly sophisticated client demands and satisfy emerging regulatory guidance. For many, the human and capital resources needed to forecast and efficiently address these needs can be a significant roadblock.
Having the right financial infrastructure in place is crucial to ensuring long-term success in the digital asset economy. Through institutional crypto custody and cross border payment solutions, crypto exchanges can future-proof their offerings to meet evolving customer needs and scale with confidence.
Key Building Blocks of Moving and Managing Value
Market estimates show that tokenization could grow to $10T by 2030, and crypto exchanges need to adapt and prepare for the inevitable shift to the digital asset economy. Through a combination of high demand services like institutional digital asset custody and streamlined crypto off-ramps, providers can better balance current and future client needs.
A secure, bank-grade self-custody solution like Ripple Custody allows exchanges to facilitate the exchange of digital assets, offer cold storage options, maximize the number of users trading on their platform, and support new products and services as use cases evolve.
Additionally, the high degree of customization offered through Ripple Custody provides exchanges with flexibility over key management and full autonomy over deployment. This enables exchanges to serve a wider range of customers — from those that are seeking long-term custody of digital assets to those that log high-frequency transactions — without compromising on security or compliance.
And with Ripple Payments, crypto exchanges can also offer streamlined cross border payment solutions and digital asset off-ramps for customers. Unfortunately, legacy cross border payments are slow, expensive and opaque, leading to a subpar user experience when off-ramping into fiat currencies.
When combined, crypto exchanges can offer real-time settlement, more affordable cross border transactions, and dramatically improved transparency—all in a safe, secure and compliant way.
Tangible Business Benefits
By future-proofing their digital asset infrastructure, crypto exchanges also gain compelling business benefits. With Ripple solutions, exchanges can leverage the power of the XRP Ledger and its native digital asset XRP to lower transaction fees, cut compliance costs and grow revenue by unlocking new use cases.
Drive revenue: The combination of Ripple Custody and Ripple Payments opens the door to the entire digital asset ecosystem, providing crypto exchanges with opportunities to increase revenue streams across both current and emerging use cases. For example, exchanges can use Ripple Custody to offer directional trades and derivative positions, trading of tokenized assets, even the opportunity to engage in spot trading across multiple cryptocurrencies. Through Ripple Payments, they can provide those same customers access to streamlined off-ramps and global payouts in preferred local currencies.
Trim compliance costs: Digital asset management can be complicated, and crypto exchanges must often navigate policies and regulations across multiple, fast-changing markets and jurisdictions. Even the largest institutions can struggle to keep pace with evolving rules around digital asset custody and cross-border payments. Ripple’s expertise in digital asset regulation helps crypto exchanges minimize these challenges. Ripple’s solutions are designed to be fully compliant with international Know Your Customer (KYC), Counter-Financing of Terrorism (CFT) and Anti-Money Laundering (AML) regulations, reducing the burden on exchanges to manage complex compliance requirements.
Lower transaction fees: Legacy global payment systems — dominated by intermediary banks and outdated correspondent networks — weren’t built to handle the complexities of digital assets or real-time cross-border payments. As a result, crypto exchanges face higher transaction fees and slower settlement times, which can negatively impact user experience and business reputation. Ripple’s global B2B payments solution helps minimize the number of intermediaries in the cross-border payment flow to enable real-time settlement with up-front pricing, transparent tracking and reduced transaction fees and FX conversion costs.
Build Your Financial Future Today
To remain competitive and address the needs of institutional investors, crypto exchanges must future-proof their financial infrastructure using secure, scalable solutions that can support emerging use cases and evolving customer demands.
This requires the right tools to streamline operations, reduce overhead costs and lower transaction fees, and ensure compliance within global regulatory frameworks. By building with Ripple, exchanges will be better positioned to respond to institutional client demands now and in the future.
Learn more about how Ripple can support institutional digital asset custody for crypto exchanges.
