Feb 25, 2021
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Digital Currency Custody Solutions On The Rise

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The ability to deliver for an unabated optimal customer experience

Wallex Trust & Custody

The recent year 2020 gave time for many to look for alternative means to increase their financial inflows and revenues upon the strike of the pandemic. Every individual, institution, and economy hurriedly turned to the digital space to see what’s in store for them as lockdowns and quarantines and strict health protocols halted many physical interactions and face-to-face communications. What turned out was the acceleration of digital adoption being incorporated in many incumbent systems, processes, and mechanisms across government and industries.

For the major part, global exposure to virtual currencies and digital assets became phenomenal as is seen reflected on the all-time-highs of Bitcoin, Ethereum, Polkadot, and every other altcoin there is. What was once looked down to and termed as “valueless, computer-based assets created out of thin air” are now sought after as reliable hedges against the dwindling value of the fiat. Celebrated high net worth marchers on the digital aisle included Microstrategy, PayPal, Visa, Mastercard, and Tesla. With the sole purpose of helping their clients buy, sell, hold, and pay for products and services using cryptocurrencies, the demand for crypto custody and digital wealth management is expected to increase this 2021.

Challenges Ahead

What Custodians Do?

The continuing progress and transformation in the industry call for custodians to facilitate such progress. The following are some areas of the growing demand for custody.

Outsourcing Growth

Other areas that are beginning to be outsourced to trusted custodians include collateral management, passive currency overlays, loan administration, investment analytics, and private equity fund administration.

Many traditional financial institutions have systems that still run under outdated mechanisms. Taking cues from keeping up with customer experience in technology with many other different areas, they are pressured to keep operational efficiency up by outsourcing their technological requirements. This is to continue leveraging their investment platform functionalities while benefitting from outsourced operations.

The demand for data management is also on the rise to consolidate data from multiple internal and external sources, the purpose of which is to strongly support asset managers to make wise and informed investment decisions. Adopting AI solutions make data management sophisticated and fast, that outsourcing custody services, indeed, is an idea whose time has come.

Also, Superannuation fund consolidation, acquisitions, and mergers will continue through the years as smaller funds will likely be absorbed by larger funded counterparts. Asset managers will naturally be put under much pressure as these megafunds need more rigorous risk management and proper governance.

The Need for Regulation

The crypto space may be a decentralized lot, but it is becoming clear that regulation can be a good thing, such that it brings investor confidence, standards, clarity, and soon, mass adoption. In Europe, the so-called MiCA or Markets in Crypto Assets Proposal aims to create a pan-European regulatory regime for crypto-assets and related services, and a pilot regime for market infrastructures based on distributed ledger technologies, which creates a safe space for testing innovative DLT-based financial market infrastructures in the European Union.

Rising Crypto Demand

The Time Has Come

To Conclude…

Wallex is a FinTech company that employs blockchain solutions to conform to your escrow, custody, exchange, transfer, and asset management needs. Our AML/KYC/CFT procedures enable us to operate internationally, conforming to each country’s policies in our area of operation. We operate under tough security conditions with round-the-clock measures to guarantee fund safety. We are at your service wherever you are, whenever you need us. Our advisory team is ever ready to assist you with a wiser way of investing. Call now.


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