Banks Reevaluate Digital Asset Custody Strategies for Future Growth
Rongchai Wang Nov 26, 2025 04:28
Banks are increasingly focusing on direct digital asset custody to enhance control over wallets, compliance, and tokenized services, positioning themselves strategically for the future of digital finance.
As the digital finance landscape evolves, banks are reassessing their strategies for digital asset custody to maintain competitive advantage and operational control. According to Fireblocks, direct custody is becoming a pivotal factor for banks in managing wallets, compliance risks, stablecoin activities, and tokenized asset services.
Strategic Shift in Custody Models
Banks traditionally approached digital assets with methods suited for traditional custody. However, digital assets require a different strategy, especially in wallet management and onchain operations. Institutions that successfully adapt to these requirements gain speed, flexibility, and a stronger market position.
Central to this transformation is the decision between direct custody and relying on third-party custodians. Direct custody allows banks to maintain sovereignty over asset movements and onchain actions, whereas third-party solutions might offer quicker market entry but limit speed, risk management, and product innovation.
Advantages of Direct Custody
Direct custody provides banks with several benefits, including transaction intent integrity, continuous operations, market-speed execution, and a competitive edge. By keeping custody in-house, banks can ensure compliance, control, and governance, aligning with evolving regulatory frameworks.
This model supports various digital asset services, such as trading, staking, and cross-border payments, enabling banks to operate on a 24/7 basis, akin to crypto-native firms.
Custody as a Gateway to Digital Services
Custody infrastructure is essential for banks to build and scale digital asset services across different business lines, including stablecoin banking, client-facing custody services, trading, and token lifecycle management. It provides the operational foundation necessary for secure, compliant service delivery.
For instance, stablecoin banking requires secure key management and compliance with regulatory reporting across jurisdictions. Platforms like Wenia and Oddo BHF's EUROD stablecoin demonstrate the strategic role of custody in enabling 24/7 programmable payments.
Future-Proofing Through Custody
Banks must make strategic decisions about custody now to remain competitive in the digital economy. Direct custody enables banks to keep pace with client needs and regulatory requirements, ensuring they can scale services effectively and explore new revenue streams.
By choosing the right custody model, banks can define their growth trajectory and leadership in the digital finance sector, capitalizing on the dynamic and fast-changing nature of digital assets.
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