Crypto Long & Short: Redefining the Custody Standard for Banking

In the latest Crypto Long & Short newsletter, Pascal Eberle from Sygnum Bank discusses the evolution of custody standards in banking, emphasizing that custody is increasingly about proving the correct holding of assets rather than merely retaining them. With the adoption of blockchain technology, traditional custody models are being challenged, particularly those that rely on centralized control. Multi-signature technology (multisig) is highlighted as a transformative solution, providing cryptographic accountability and allowing clients to maintain a degree of control over their assets. Eberle argues that as investors recognize the benefits of double verification and real-time on-chain monitoring, they will demand these new standards over conventional methods, which have inherent risks. The article critiques legacy systems that necessitate trust in banks and regulators, advocating instead for a model where clients can actively participate in the protection of their assets. The newsletter also expresses concern about the current market environment for crypto, seeking leadership and clarity to invigorate the market amidst uncertain conditions and stagnant prices.

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