Crypto Custody Services and Their Applications
Ireland, Dublin, December 11, 2020, ZEXPRWIRE, The secure storage of digital assets has been an issue ever since the dawn of the blockchain industry and many solutions have been proposed for setting the fears of asset holders to rest. One of the most recent solutions for the secure storage dilemma is the introduction of custody services.
Cryptocurrency custody services pave the way for the secure storage of digital assets in large volumes. The development of the given sector can become one of the key factors in stimulating the redirection of new capital flows from institutional investors into the cryptocurrency industry.
What’s In It
Custody solutions are third-party service providers that offer holders of digital assets secure storage facilities for their cryptocurrencies. Such services are most commonly used by specialized companies, as they include a number of benefits for their users.
First and foremost, the need for custody services was underpinned by the development of alternative payment infrastructures and the ensuing ease of their use. With the growth of the digital assets market, the demand for storage solutions increased in parallel, thus creating supply of services that were both convenient and relatively cheaper than alternatives.
The growth in the number of service users resulted in the development of the custody services sector as the need for the safe storage of assets for businesses and long-term investors arose with the accumulation of digital assets on wallets.
The emergence of state regulation in most jurisdictions and the need to comply with legal requirements also contributed to the emergence of custody services that would offer holders of digital assets regulated and legal means of storage. Custody services are often offered by international organizations and funds that have obtained licensing and are seeking to increase their client base through the attraction of cryptocurrency investors. The availability of insurances in case of loss of cryptocurrencies also makes them attractive for cryptocurrency investors
But the most important factor leading to the development of the custody services sector is the launch of cryptocurrency payments by leading payment companies like PayPal, Visa and Revolut. The broader adoption of cryptocurrencies on the global financial arena is fueling demand for a variety of catering services and custody solutions are among them.
Catering to Demand
The crypto market is experiencing rapid growth as indicated by the latest statistics from Coinmarketcap. According to its latest report, $897.7 million was allocated across 212 venture deals on the market during the third quarter of 2020 and the DeFi segment accounted for roughly 20% of all venture deals for the quarter. Another report by Ecency stated that the crypto market experienced positive growth of 31% in market capitalization and 34% in trading volume over the same period with over $9 billion in inflows over the quarter alone.
Overall, the cumulative market capitalization of cryptocurrencies had reached $237.1 billion in 2019, up from the 2018 value of $128.78 billion. Up until 2016, the total market capitalization was below $18 billion and stands at $567.79 billion at present with the total volume in DeFi currently being $5.42 billion.
With the expected capitalization of the crypto market expected to reach $1.758 trillion by 2027, the demand for new services in the industry is expected to grow. As such, Cryptoprocessing.io is seeking to implement and launch the Digital Custody Service, a depository service for storing cryptocurrencies, which would provide protection against natural damages, human error and cyber-attacks.
Cryptoprocessing.io acts as a provider of a secure blockchain infrastructure that lies at the heart of the repository that would make Digital Custody Service a cryptocurrency storage mechanism similar to a standard safe deposit box.
The service’s principle of operation is straightforward, as the account holder would enter into a storage agreement with a bank that uses the Cryptoprocessing.io infrastructure. The secret keys to the cryptocurrency wallets would be stored in a medium with no external access to anyone, including service personnel. Such an approach would give the depositary receipt the status of an asset.
“The development of payment services and the arrival of large financial companies in the cryptocurrency market requires an infrastructure that can guarantee the safe storage of digital assets. Our company is focused on meeting the needs of the new influx of institutional users with strict security regulations and high SLA requirements,” as stated by Victor Krylov, CEO of Cryptoprocessing.io.
Conclusion
Custody services are necessary for users who have recently entered the industry and are not yet familiar with the security and technical requirements for cryptocurrency storage. Such services will also be in demand by large investors seeking to invest in cryptocurrencies while ensuring storage security without delving into the details. The economic feasibility of custody services is well founded for large investors, considering the underlying insurances and the high levels of security in light of the recent hacks of exchanges. It is reasonable to believe that services, such as those offered by Cryptoprocessing.io, will be in demand by users in such hubs of crypto market activity as New York, Singapore and the Asian regions.
Media contact
Company: CryptoProcessing.io
Contact: Victor Krylov
Email: [email protected]
