There is expected to be a lot of institutional investors over the course of 2019 for the crypto space and it seems that such a thing has just begun.
Swissquote is an online banking group that has built a $620 million empire since it was founded at the turn of the century. At the end of last week, the firm announced that it is going to be teaming up with the Zug-based Crypto Storage to allow cryptocurrency custodial services on its platform. They said that the institutional investors on its platform would be able to transfer cryptocurrencies form their external wallets to a Swissquote account and vice versa.
This move comes as part of Swissquote’s cryptocurrency expansion. In 2017, the institution had opened a cryptocurrency trading platform which allowed its customers to trade some of the biggest digital currencies including, Bitcoin, Ether, XRP and Litecoin.
As reported by NewsBTC,
“custody has been the missing link of the cryptocurrency infrastructure. As of now, crypto exchanges double as custodians which not just raise regulatory concerns but puts assets’ security at risk. At the same time, traditional custodians lack the experience of handling digital assets, whose security relies on holding wallets’ private keys near and dear.”
With this kind of gap, institutional investors have been keeping a clear distance from investing in Bitcoin, XRP, Ether or any of the other top cryptocurrencies in the space.
By teaming up with the FinTech firm Crypto Storage, Swissquote is ensuring that the responsibility of digital asset custodianship remains with a company that has a proven track record of being efficient in the field. Crypto Storage offers a “proprietary infrastructure solution to manage private keys, both physical and digital, on highest grade hardware security modules” which is similar to those who used the Swiss National Bank.
The Nuclear Option
Considering that private keys could be stored as a kind of physical evidence, for example, Crypto Storage has ensured that its rack servers will keep safe from physical attacks. The startup’s Stijn Vander Straeten admitted that they were using military bunkers in a secret location as a shield to protect their servers. According to Straeten, even a nuclear bomb couldn’t make an impact on the bunkers.
Swissquote’s decision to expand its crypto solution suggests demand from the institutional front. The firm has clearly foreseen big inbound investments into this space just like the rest of the crypto community.
Author: Robert Johnson