Digital Asset Custody

Digital asset custody fees have become an important topic in the crypto-currency community. Despite the fact that the number of crypto-currency users is growing, only fifteen banks have publicly stated their intention to build such a capability. The question now is whether or not the fees charged by digital asset custody companies will be sufficient to justify the risk posed by digital assets.

The fees associated with digital asset custody services are often high, but this is only because these firms have to operate with inefficient processes. The manual processes associated with cold storage are slow and error-prone. In addition, multisig is an inflexible technology that makes it difficult to scale operations and adapt to changing needs. This inflexibility increases transaction costs.

In recent months, the cryptocurrency market has seen tremendous growth. The arrival of institutional investors has boosted the price of cryptocurrencies. As such, custodians are now seeking ways to keep their clients’ assets safe. In addition, retail investors have begun to anticipate the arrival of institutional investors, which is driving the rise in cryptocurrency prices. For institutional investors, “not your keys, not your coins” is an important concept, and they want professional storage. Ideally, they prefer high-grade custody.

Digital Asset Custody Fees

Keeping private keys secure is fundamentally a technical need, and requires specific hygiene protocols. Additionally, prospective users should look at the regulatory framework surrounding a custody provider. Insurance provisions and the legal basis of assets are also important. It is important to note that this guide does not replace professional advice, so be sure to seek legal and tax advice from a qualified professional.

Typically, custodians charge a percentage of assets under custody each year. This is usually less than 1%. Some also charge a flat setup fee when opening an account. Some crypto custodians even waive the setup fee and withdrawal fee. However, some will require a percentage of value to withdraw assets.

Digital asset custody fees are a relatively new industry. Many large companies have begun offering custody services to individuals and small businesses. In this market, specialized cryptocurrency exchanges are among the early entrants. These exchanges allow people to buy and sell Bitcoin and other cryptocurrencies. However, early exchanges lacked adequate security and often lost clients’ assets. Modern exchanges prioritize security. Most of these exchanges are licensed in local jurisdictions worldwide.

Digital asset custody fees should be considered as part of a client’s investment strategy. These fees are not the sole responsibility of the Trust Company, but should be considered a consideration when making decisions about where to invest. As with any financial decision, the client should consult with a tax or legal advisor before making any investment.