Digital asset infrastructure for institutions Fireblocks on Friday announced the launch of the Fireblocks Global Custodian Partner Program, aiming to address the rising demand for qualified custodians in the digital asset space, particularly as institutional investors increasingly explore exposure through tokenization, ETFs and other investment vehicles.
Addressing Regulatory Scrutiny And Investor Needs
The program’s launch comes amid a backdrop of heightened regulatory scrutiny within the digital asset industry. In February 2023, the US Securities and Exchange Commission (SEC) proposed stricter asset safeguarding requirements for registered investment advisors (RIAs).
This, coupled with the growing adoption of bitcoin spot ETFs, has underscored the need for robust custody solutions for institutional investors.
“The need for segregated functions and professional grade safeguards for assets has become a key priority,” Adam Levine, SVP, Corporate Development & Partnerships at Fireblocks told Benzinga. “Fireblocks is leveraging its technology to enable clients and RIAs to comply with new rules by making custody arrangements easily accessible.”
Connecting Institutions With Licensed Custodians
Built on the Fireblocks Network, the program will initially feature a network of licensed custodians across the United States, United Arab Emirates, United Kingdom, Singapore, Thailand and Australia.
Fireblocks clients will be able to seamlessly connect with these qualified custodians directly through the Fireblocks platform, streamlining their digital asset operations while maintaining compliance with evolving regulations.
Focus on Security And Partner Selection
Fireblocks prioritizes security and regulatory compliance when selecting program partners.
All participating custodians leverage Fireblocks’ industry-leading technology and infrastructure, ensuring the highest levels of security for client assets. Additionally, each custodian holds the necessary licenses within their respective jurisdictions to provide digital asset custody services.
“Participants of the program each leverage Fireblocks technology – thereby leveraging the most secure and robust digital asset infrastructure,” explained Levine. “These custodians will also integrate with the Fireblocks Network, to allow clients to manage their digital assets across multiple venues all from their Fireblocks account. Furthermore, partners must have the relevant license in their jurisdiction to provide digital asset custody.”
Also Read: Bitcoin Spot ETFs Collect $11.29M Net Inflows On Thursday
Global Expansion And Addressing Challenges
Fireblocks plans to strategically expand the program across key jurisdictions globally, with a focus on the European Union in the coming months.
The company acknowledges the inherent challenges of implementing a global program, including navigating diverse market dynamics and complying with regional licensing requirements.
“Launching a global program inherently has unique jurisdictional challenges it must overcome,” said Levine. “Fireblocks must carefully select partners that have deep market knowledge, appropriate licensing as determined by the local regulator, and service offerings to address local market demands.”
Benefits For Institutional Investors
The Fireblocks Global Custodian Partner Program directly addresses the needs of institutional investors, especially those new to the digital asset space.
The program provides access to a network of pre-vetted, licensed custodians offering institutional-grade security.
Additionally, Fireblocks’ platform allows institutional investors to manage their digital assets across various self-custody and custodial solutions, trading venues, and other service providers, promoting operational efficiency and risk reduction.
Looking Ahead: The Future Of Digital Asset Infrastructure
Fireblocks believes that digital asset infrastructure providers like themselves will play a crucial role in facilitating the broader adoption of digital assets in the coming years.
The company plans to continue innovating and providing secure and efficient solutions to power leading digital asset businesses globally.
“As the adoption of digital assets – crypto, tokenized RWAs, and NFTs – continues, the need for secure and efficient infrastructure will be paramount,” said Levine. “Additionally, Fireblocks’ willingness to actively partner with existing technology infrastructure, complimentary blockchain-based technology providers, and service providers will catalyze the digital asset transformation that is actively underway.”
Fireblocks Trust Company To Complement Program
Further bolstering its commitment to providing comprehensive custody solutions, Fireblocks has also announced its intention to launch a limited-purpose trust company under the regulation of the New York Department of Financial Services (NYDFS). Pending final approval, the Fireblocks Trust Company will offer cold storage custody solutions for digital assets to US institutional clients.
“The decision to launch the Fireblocks Trust Company is in response to increased client demand for alternative digital asset-focused qualified custodians in the US,” said Levine. “Once launched, Fireblocks Trust Company will be part of the Global Custodian Partner Program, and further differentiate the network benefits of the Fireblocks platform.”
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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