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Gazprombank Announces Launch of Crypto Custody Service By Mid-2019

Gazprombank, the banking division of Russian giant Gazprom is working with Avaloq and Metaco to provide crypto asset custody services for institutional clients next year.

According to an official press release issued on 6 December, METACO expressed that the strategic decision is part of a joint effort that has been going on for some time. They are also confident that this service will start operating in the second quarter of next year:

Fintech leader Avaloq and crypto-asset custody infrastructure specialist METACO* have entered into an innovation partnership with Gazprombank (Switzerland) Ltd, a Swiss bank, to implement their integrated crypto asset solution. This product innovation aims to provide banks and wealth managers with a fully integrated solution for the management of client portfolios across all asset classes including cryptocurrencies. Gazprombank (Switzerland) Ltd, which is already an Avaloq client, aims to offer a cryptocurrency service to its clients in mid-2019.

According to information from the three firms involved, the service will focus on security. For this purpose, Gazprombank will develop a product using the SILO technology, a “highly secure crypto-asset custody solution for institutional clients” created by METACO. In turn, this product will run within the Avaloq Banking Suite.

Part of METACO team during SILO’s launch

Gazprom is Entering The Crypto-Verse With a Secure, User-Friendly Custody Service

Thomas Beck, Group CTO at Avaloq, assured that the partnership will offer a product not only with high-quality standards but also highly user-friendly.

For both institutions and bank clients, trust is key. Avaloq and METACO have considered this for the development of a fully integrated solution that can be offered to clients by their trusted bank. Thanks to the close integration of the METACO storage solution, banking and wealth management customers won’t have to trust additional third parties when trading with cryptocurrencies. By bringing together all asset classes in one portfolio view, the solution will also ensure the highest levels of convenience and usability.

Despite maintaining a stance sometimes contrary to the use of cryptocurrencies, Russian policy has shown great interest in the development of blockchain technologies. As Gazprom is a key industry for the Russian economy (Gazprom is the leading supplier of gas in Europe), it is possible that this decision will lighten the harsh vision of the state in this regard.

It is also important to note that Gazprombank is a company domiciled in Switzerland, so there are no legal problems that could complicate the operation of the new crypto custody service.

The post Gazprombank Announces Launch of Crypto Custody Service By Mid-2019 appeared first on Ethereum World News.

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Goldman Sachs Could Support Crypto Custody In The Near Future

Cryptocurrency custody services are seen by many as the next step for institutional adoption. As per a Bloomberg report released on Monday morning, Goldman Sachs, one of the most respected financial institutions in the world, is considering the creation of an in-house custody service.

This news comes only a few months after Goldman Sachs began to trade Bitcoin futures for its clients, with this being the first substantial move that the firm took to back the crypto industry.

Citing people familiar with the matter, Bloomberg journalists pointed out that this service, if created, would be aimed at clients (likely institutional investors/firms) looking to safeguard their valuable crypto-asset investments from cyberattacking attempts. The unnamed insiders clarified that no solid plan is set in place yet, adding that there also isn’t a definitive timeline for the development and potential release of this service.

While custody doesn’t sound like much on the surface, it is likely that the release of a fully fledged Goldman-backed crypto service would hail in the next round of institutional involvement, likely pushing innovation and prices in this nascent industry to new all-time highs.

However, a custody service may not be the be all and end all of the firm’s crypto-related aspirations. The insiders went on to note that a successful custody offering could lead the New York-based financial giant to launch other crypto-focused ventures, such as a prime brokerage in upcoming years.

While neither confirming or denying the existence of a move towards custody, a representative of Goldman Sachs stated:

“In response to client interest in various digital products we are exploring how best to serve them in this space. At this point we have not reached a conclusion on the scope of our digital asset offering.”

Oddly enough, this news comes only a few days after the firm’s investment strategy group (ISG) revealed that they hold an aversion to cryptocurrencies. In a report from Goldman’s ISG, investment officers at the firm noted that they expect cryptocurrency values to decline moving into the future, adding that cryptos do not hold the prerequisites required to be classified as bona-fide currencies.

While this was an overall set of bearish sentiment, Nathaniel Popper, the author of Digital Gold and a well-known journalist at the New York Times, pointed out that this is only the sentiment held by one portion of the firm’s expansive employee base.

Goldman Isn’t The Only Wall Street Firm To Step Into The Crypto Boxing Ring

It is important to note that Goldman is not the only legacy market-centric firm to make a foray into cryptocurrency-related products, or custody to be more specific.

As reported by Ethereum World News in early-June, Fidelity Investments, an American finanical services firm with $2.5 trillion under management, has begun work on a “first-in-class custodian service for Bitcoin and other digital currencies.”

Pete Chercewich, the President of Northern Trust’s corporate and institutional services subsidiary,  told Bloomberg that his firm has also begun to develop a method of reliably securing crypto assets. The executive of the financial giant also noted that the plan is to offer custody support at industry-low fees, beating out the relatively high cost of alternative institutional-focused security solutions.

While taking into account the moves made by a multitude of Wall Street firms, it becomes apparent that Goldman may have some competition to deal with when it comes to offering the most reliable crypto services, for the most affordable prices.

Image Courtesy of Jason Baker/Flickr

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Hong Kong Investment Firm To Launch Crypto Custody Service For Institutional Investors

Hong Kong Investment Firm To Open Custody Service 

The South China Morning Post, a Hong Kong-based news source for English readers, recently revealed that a Hong Kong-based firm will be opening up a crypto-custody service in the near future.

According to the aforementioned news source, Funsang Investment Office, which is an asset management firm, has been receiving mounting interest about cryptocurrencies from its vast array of high-net-worth individuals and institutional clients.

This interest has prompted the management firm to begin discussing plans for a custody service, which Fusang’s CEO expects to open it in the fourth quarter of this year.

Henry Chong, the Chief Executive Officer of the firm, elaborated on the plans for service, stating that “Fusang Vault,” as the project is now called, will hold crypto assets for clients, while also auditing the funds on a periodic basis.

Chong went on to talk about why a service like Fusang Vault is needed, drawing connections between financial bonds and cryptos, further noting that crypto assets lack ownership data, unlike something like a land deed. He stated:

“Digital assets are akin to bearer bonds, whereby whoever that is holding the security is presumed to be the owner and there is no registration of ownership information of the security. Hence, the way we keep digital asset [sic] secured is of paramount importance.”

The CEO also pointed out that his firm is currently working with insurers, attempting to work out a system where client’s crypto assets can be covered under new insurance policies.

Growing Need For Institutional Investor Services, Especially in Asia

Institutional investment and interest have long been held as the holy grail of cryptocurrencies, with many expecting that an influx of institutional capital will bring this industry to the mainstream.

However, this industry currently doesn’t have the proper infrastructure to host many institutional clients. Additionally, the current state of the market encourages speculative behaviors, with a majority of retail investors looking to make a quick buck. Institutional investors, like the many notable Wall Street investment firms, have seen that, and have mostly shied away from opening their wallets for the industry.

But institutional sentiment regarding this market is quickly changing, with firms like Coinbase, Blockchain, and Circle all opening up services aimed at attracting investors from legacy markets. These services have already been met with success, despite their youth, with Coinbase Custody already reporting millions under management and Circle seeing billions in trade volume each and every month.

But as pointed out by Blockchain CEO Peter Smith, a majority of institutional clients are currently based in the U.S. and Western Europe, essentially leaving out the Asian market.

Despite being seen as the home of cryptocurrencies, institutional firms based in Asia have hesitated to invest into the cryptocurrency industry. This is why a service like Fusang Vault is important, opening up the industry to an array of new investors and institutional capital.

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