Crypto Long & Short: Redefining the Custody Standard for Banking

In this edition of the Crypto Long & Short Newsletter, Pascal Eberle highlights a significant shift in custody standards for banking due to the integration of blockchain technology. The article argues that custody is evolving to focus on proving asset security, particularly through multi-signature (multisig) technology, which allows clients to maintain control over their assets. Traditional custody models rely heavily on centralized control, involving trust in external institutions, which can lead to counterparty risks. In contrast, multisig technology distributes control and requires multiple approvals for transactions, creating a transparent and accountable system. This change reflects a broader philosophical and technological revolution in finance, emphasizing clients’ need for visibility and security in asset management. As banks adapt to these innovations, those resisting will likely be left behind in a competitive market, as clients increasingly demand the advantages offered by cryptographic accountability.

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