Following the licensing of Quidax in Nigeria, five other Blockchain firms were admitted under the Nigerian Regulatory Incubation Program (RI), among them BlockVault Custodian Ltd.
What is a Digital Custodian?
A digital custodian is a firm or organization that provides storage solutions for digital assets like fiat currency, especially for large holders of those assets.
Therefore, in the context of cryptocurrencies, a Crypto Custodian or Crypto Custody Solution is an organization that provides a combination of hardware wallets and software wallets for the safe storage of crypto assets for large holders and investors.
Read Also: SEC Nigeria Issues the First Provisional Operating License to Crypto Exchanges
Major global Crypto Custody Solutions include
- Coinbase Custody
- Bitgo
- Gemini.
Although Crypto Custody Solutions are still in their infancy and have not yet achieved mass adoption like other crypto use cases, such as DeFi, GameFi, and NFTs, their importance is profound.
Firstly, the crypto space has long advocated for self-custody; however, this approach has a significant drawback—newcomers find it difficult to onboard and safeguard their assets, making them more susceptible to scams.
With Crypto Custody Solutions, newcomers can more easily enter the crypto space, with third-party solutions safeguarding their assets.
Secondly, third-party custodians possess professional expertise in safeguarding crypto assets. By entrusting your assets to them, you can benefit from their risk management strategies and expertise.
Additionally, Crypto Custody Solutions employ a wide range of security strategies to protect their clients’ assets, including multi-factor authentication, cold storage, and encryption. These measures help mitigate the risks of hacks, scams, and phishing attacks.
Finally, Crypto Custody Solutions are regulatory-compliant, providing oversight that is crucial for large-scale holders and investors with string.
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