In a major breakthrough, cryptocurrency startup BitGo gets the regulatory approval as a qualified custodian of digital assets. As per the official press release, the BitGo Trust Company got an official license from the South Dakota Division of Banking. BitGo’s chief compliance and legal officer Shahla Ali said that the company can now pitch regulated storage solution to institutional investors.

Over the last one year, BitGo has been working hard on introducing modern security solutions for digital assets. While commenting on this historic achievement, BitGo CEO Mike Belshe said:

“Custody has been the missing piece of cryptocurrency market infrastructure and this gap has kept institutional investors out of the market. Traditional custodians don’t have experience handling cryptocurrency. Exchanges that double as custodians present a conflict of interest and raise regulatory concerns. BitGo Trust Company is a qualified custodian, and therefore the only custody offering that delivers the highest levels of both security and regulatory compliance.”

BitGo Custody solution is the outcome of the company’s years of dedication in providing institutional-grade, multi-signature, multi-coin hot wallet, etc. The custody solution comes with strict policies, controls, procedures, and disclosures, which are the essential requirements of the qualified custodian. Some of the key features of BitGo’s Custody solution includes:

One of the key hurdles to institutional players entering the cryptocurrency space is the lack of safe and secure custody solutions. Monica Summerville, a senior analyst at TABB Group specializing, told CNBC:

“Institutional investors are very interested in finding a solution, but they haven’t seen one that they think is perfect for various reasons. They still self-custody, and manage all their own keys.”

Several cryptocurrency startups are working to introduce robust custody solutions and plug the bottlenecks stopping institutional entry. Smaller retail investors often use offline, cold storage solutions to store digital assets securely. However, the same solution is not suitable for hedge funds and family offices.

To store funds worth more than $150 in assets, private funds are required to have a third-party like a bank acting as a custodian. The custodians are responsible for managing the cryptographic “private keys” allowing customers safe access to their assets holding.

A previous study notes that regulated custody solutions will attract $20 Billion of investors funds.

BitGo has got some more competitors working on developing crypto custody solutions. Crypto exchanges like Gemini and Coinbase have already launched custody solutions for institutional investors. Banking giants like Nomura and Goldman Sachs are also in the race of providing storage custody solutions.

Christian Bolu, a cryptocurrency analyst at Sanford C. Bernstein, said:

“As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms to engage in the eco-system. These include the provision of custodial and asset management services as well as traditional brokerage functions like market-making.”

The post BitGo Receives Regulatory Approval to Launch Custody Service for Digital Assets appeared first on CoinSpeaker.

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