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Safe asset custody is ‘Gordian Knot’ facing scale up of digital market sector


GBBC Digital Finance and the International Securities Services Association (ISSA) have published a report on digital asset custody (DAC). The report’s authors have emphasised how critical safe custody will be for the future development of the digital assets sector.

The report is a primer to help move the knowledge of DAC forward by bringing to the forefront, the opportunities and barriers DAC providers have to successfully navigate moving to these new digital technologies and ways of working.

Glen Fernandes, Co-Chair of the ISSA DLT and Digital Working Group, said that it has become clear that in order to advance the adoption of digital assets at an industrial scale, the industry needs to come together to create safe, secure and efficient custody foundations and services that allow asset owners to confidently hold and trade their digital assets.

The Gordian Knot facing safe scaling of the digital assets sector

Lawrence Wintermeyer, Chair of the GDF Board, added: “Digital asset custody is the Gordian Knot to enabling industry to safely scale digital assets. We must cut the knot using this next generation of technology to build trust, and safeguard investors assets to market standards.”

The report was produced in a joint Custody Working Group, a collaboration between GDF and ISSA, supported by their member firms – including working group co-chairs Brown Brothers Harriman, Metaco and State Street – and the working group secretariat, Deloitte.

“Digital Asset Custody Deciphered” sets out to provide financial services professionals, investors and policymakers of all experience and levels with a starting point, covering nine factors in subsections across three section domains:

  • Legal, Regulation, and Financial Crime
  • Settlement & Finality, and Asset Segregation
  • DLT Governance, Staking, Key Management, and Interoperability.

Many in the industry leading this next era of digital transformation, from innovative fintechs to established institutions, are committed to the potential benefits of new digital technologies.

Making secure digital assets custody a reality

Colin Parry, Chief Executive Officer of ISSA, said: “We believe all markets should be underpinned by a safe and secure mechanism to protect investors’ assets. Our aim for this document is to progress the discussions and make recommendations to enable DAC to be that mechanism. We ask that all market participants engage to make the safety and security of investor assets a reality.”

Seamus Donoghue, Chief Growth Officer at Metaco, added: “Institutional digital asset custody underpins tomorrow’s financial infrastructure and navigating its complexities will become a prerequisite for any financial institution aiming to stay competitive in the modern marketplace.”

GDF is a global members association advocating and accelerating the adoption of best practices for crypto and digital assets. GDF’s mission is to promote and facilitate greater adoption of market standards for digital assets through the development of best practices and governance standards by convening industry, policymakers, and regulators.

GDF leads the global financial service sector as part of the Global Blockchain Business Council group, the largest and leading industry association for the blockchain technology and digital assets industry with more than 500 institutional members, and 231 ambassadors from across 109 jurisdictions and disciplines.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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