Custody for digital assets | Swen Werner | VOX Ep. 38
State Street Digital execs discuss what it takes to build institution-grade custody for digital assets.
Custody for digital assets remains a hurdle for licensed financial institutions. Swen Werner and Irfan Ahmad of State Street Digital speak with Jame DiBiasio about the challenges of a traditional custodian building a new way of doing business in the world of digital assets.
The premise of peer-to-peer crypto is for users to “be your own bank”. But institutions have compliance, risk, and licensing requirements that require a third-party custodian.
There are also issues around how to reimagine custody for assets that are currently either stored in hot wallets, exposed to risk, or offline in cold wallets and inert. Building solutions for traditional investors is also complicated by the fast-moving nature of crypto markets.
But as traditional players in securities and asset services such as State Street to advance the nature of custody for digital assets, they are also bringing those innovations back to the world of traditional securities.
- 0:00 – Swen Werner and Irfan Ahmad of State Street Digital
- 1:00 – Challenges of custody in digital assets, building a platform for institutions
- 4:07 – Making P2P tech work for regulated institutions, processes versus code, new concepts of workflows
- 7:44 – Regulation and what is permitted in different jurisdictions, how regulators perceive ownership
- 10:31 – With custody solutions, how big will inflows be from traditional investors?
- 11:52 – What kind of digital assets will be in demand, and for what purposes – building for new transaction models
- 14:06 – Security and overcoming the division between hot and cold wallets
- 15:43 – Multiparty computation, how it works, risk management in traditional custody versus relying on onchain security
- 19:02 – How traditional institutions keep pace with change in digital assets
- 21:38 – Agreeing to definitions and taxonomy in digital assets
- 24:41 – What standards does State Street Digital hope to set?
- 27:48 – Convergence between crypto and traditional markets, bringing digital-asset infrastructure to the traditional securities world.