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Dutch bank ING explores crypto custody solutions

Elliot Hill

Major Dutch bank ING is considering offering its clients access to institutional-grade crypto and digital asset custody solutions, according to a report by Reuters.

A spokesperson for ING told Reuters that the bank sees “increasing opportunities with regard to digital assets on both asset-backed and native security tokens”, and as such has been working internally to accommodate their storage.

ING has previously expressed its interest in digital assets, announcing in January that it has signed a five-year licensing deal with blockchain platform provider R3.

R3 and ING are building on top of permissioned blockchain Corda to roll out enterprise blockchain solutions for the bank’s backend processes.

However, there are currently very few ways for ING’s customers to access the digital asset markets in a way that is both easy and legally compliant.

The bank says that its custody project is still in its early stages, but will be designed with existing digital assets and newly tokenised traditional assets in mind.

Digital banks or traditional banks?

Since digital assets have grown in popularity among professional investors, many existing financial companies have explored offering specialised custody solutions.

Earlier this year, Swiss digital asset start-up Sygnum became the first regulated digital asset bank in the world, followed closely by fellow Swiss company Seba.

Both of these digital asset banks aim to provide institutional-grade digital asset storage to professional investors, funds, and family offices.

Similarly, some trading platforms, such as Coinbase, have also traditionally provided digital asset custody.

Coinbase stores over 900,000 Bitcoins, including $2.7 billion in digital assets for Grayscale, and more recently became the official custodian for two major Asian funds.

However, companies like Coinbase aren’t yet regulated like regular banks, which may prove unattractive in the long term for professional investors.

With traditional banks now moving into the digital asset space, and specialist digital asset banking providers emerging and becoming regulated, there is a wealth of options available for compliant digital asset custody.

As a result, existing custodians such as Coinbase may receive significantly less market share of the crypto custody market than they have previously enjoyed.

 

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