Custody Solutions: The Key To Institutional Money
by Marvin Dumont
Apollo Foundation is building an all-in-one currency with the best privacy features anywhere. Hermes 1.0 also features two-second block settlements, which is the fastest transaction speed in the industry.
But there’s more to increasing cryptos’ market capitalization. Aside from real-world utility and global adoption, blockchain ventures will need enthusiasm from entities that have hundreds of billions of dollars to invest. These include family offices, hedge funds, endowments, pension funds and investment banks.
Cryptos are already volatile and perceived as risky asset class. Institutions can’t afford to lose their holdings via hacks, scams, or lost passphrases. Similar to winning lottery tickets, most cryptocurrencies are bearer instruments which means whoever controls a password controls the money.
That’s where custodianship comes in: Institutional investors like to hire experts to administer their assets so they can focus on fundraising, planning and investing.
Big and small firms are racing to provide custodian services. They include investment firms (such as Fidelity), exchanges, hardware wallets, and startups. Their forthcoming solutions will mitigate the risk of lost authentication codes and other requirements to access digital funds. Such services can also include insurance products given the large amounts involved.
Because institutions have the wherewithal to buy thousands of bitcoins, it’s not uncommon for intermediaries to take extreme precautions to safeguard assets. For example, Wall Street guru Mike Novogratz keeps his cryptos in disconnected computers that are locked inside physical vaults. And similar to how Coca-Cola protects its multi-billion-dollar recipes, the Winklevoss twins distribute paper fragments of private keys across multiple vaults.
It’s prudent for institutions to hire crypto experts to secure their bearer-instrument assets.
Custodianship is a huge leap for the 10-year-old industry: In Q2 2018 the four biggest custody banks held $114 trillion in assets under custody (AUC). Moreover, the U.S. Securities and Exchange Commission (SEC) requires institutional investors with more than $150,000 to store holdings with a qualified custodian.
That’s why the above services are necessary for cryptocurrencies to get a pricing boost. The market is currently way down. But big money could bring brighter days ahead.
About Apollo:
Apollo all-in-one privacy currency (APL) has fixed supply and 0% inflation. It combines all mainstream features in an unregulatable platform. APL is also one of the fastest cryptos anywhere with 2-second block speed.
With the launch of Olympus Protocol 2.0 APL offers the best privacy in the industry by obfuscating your physical location and transaction details. (See announcement and YouTube video.) A forthcoming 3.0 version will add more privacy tech such as Advanced IP Masking, Private Ledger, and Decentralized Exchange.
By combining encrypted-data IP Masking, people who live in restrictive jurisdictions such as China (where Tor is blocked) can still transact using Apollo.
Check out our listing on CoinMarketCap.
“I prefer the tumult of liberty to the quiet of servitude.” — Thomas Jefferson
