The Institutional Cryptocurrency Dilemma
Despite the growing popularity of cryptocurrencies, institutional investors remain cautious, as highlighted in a recent KPMG report. Trust issues and perceived risks are high stakes in the game of blockchain poker. With more than $9.8 billion worth of crypto reportedly stolen since 2017, who can blame them?
Security Breaches: A Deep Dive
A significant takeaway from the report was the cause behind these thefts. Most of the losses stemmed from lax security and poorly written code. It’s like trusting your Aunt Mabel to handle your credit card information while she’s still figuring out her smartphone!
The Demand for Custody Services
In response to these security concerns, companies from both traditional finance and the crypto realm are stepping up to offer custody services. Imagine a physical vault for your virtual coins! Notable players include the likes of Fidelity and Intercontinental Exchange, rubbing elbows with crypto stalwarts such as Coinbase and Gemini.
Quote from the Expert
“Institutional investors especially will not risk owning crypto assets if their value cannot be safeguarded in the same way their cash, stocks, and bonds are.” – Sal Ternullo, KPMG
The Bright Side: Opportunities for Custodians
On a positive note, custodians stand to reap the rewards as the crypto ecosystem expands. With institutional dollars flowing in, custodians can profit from both management fees for their services and potentially from additional services tailored to the unique crypto landscape. It’s a win-win for them, as long as they can pass the security test.
Rethinking Compliance in Crypto
Gone are the days when compliance meant just filling out forms. With the explosion of cryptocurrency, KPMG stresses that existing compliance methods must evolve. Anti-money laundering and know-your-client regulations are now essential for everyone, including banks and exchanges. Even traditional institutions need to step up their game, or risk watching the crypto ship sail without them.
+ There are no comments
Add yours