Binance Research on institutional crypto custody (May 2023)
Thread423 words
Summary of Binance Research's custody report: three custodian categories, services beyond custody such as staking and trading, off-exchange settlement, convergence with prime brokerage, early regulation and TradFi entrants.
Key claims
Custodians fall into custodians, custody technology providers and hybrids
Off-exchange settlement lets institutions trade without assets sitting on an exchange
0/ I read the report "Institutional Custody in Crypto" by @BinanceResearch so you don't have to 📚🔍
find a link to the report & a summary of the key takeaways below 📊 👇
🧵 (0/13)
1/ the report provides a comprehensive analysis of Institutional Crypto Custody as of May 2023. Find the key insights into this evolving and highly promising sector summarized below 👇
2/ 💼 Institutions are increasingly seeking exposure to the crypto asset class. As cryptocurrencies grow in popularity, they're becoming an important asset class for a wide range of institutional investors
3/ 🛡️ Institutional custodians provide much-needed peace of mind for institutions venturing into crypto. By adhering to security, operational, and legal best practices, they are laying the groundwork for broader institutional participation in the crypto space
4/ 📊 Institutional custodians are primarily classified into three categories: custodians, custodial technology providers, and hybrid custodians. Each comes with its own strengths and operational models
5/ 🔒 Unlike exchanges, institutional custodians prioritize asset security and protection. This focus on safeguarding assets is a key differentiator and a critical element of their value proposition
6/ 💡 These custodians are not just redefining what it means to be a crypto custodian, but they are also offering innovative custody solutions, adapting to the evolving needs of institutions in the crypto asset space
7/ 📈 Beyond just custody, institutional custodians provide a wide range of services including trading, staking, insurance, audit, escrow, accounting, and research offerings. This positions them as comprehensive solutions for institutional crypto needs
8/ 🔄 Off-exchange settlement (OES) is an exciting offering in institutional custody. It provides a level of convenience similar to exchange-based transactions without assets actually being on an exchange - a perfect blend of security and efficiency
9/ 💰 Institutional custodians are evolving to mirror the offerings of prime brokerages, indicating a growing maturation of the crypto custody space and its increasing alignment with traditional finance structures
10/ 🏛️ Regulations around crypto custody are still in their early stages, but they are gradually becoming clearer. This regulatory clarity will be crucial for further institutional participation and overall growth of the sector
11/ 🚀 We're seeing traditional financial custodians entering the crypto custody space, setting the stage for a fascinating competition with crypto-native custodians
12/ 🌐 In conclusion, institutional crypto custody is on a growth trajectory, offering novel solutions and broadening its scope. As it continues to evolve, it will play a pivotal role in shaping the future of institutional involvement in crypto
13/ check out the report here 📊👇
bit.ly/InstitutionalCustody
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