Applying Sub-Custody to Digital Assets

Introduction

The exploration of digital asset custodial relationships between traditional financial institutions and digital asset service providers is a logical step in the evolution of the industry, given increased regulatory clarity requirements as well as growing demand from clients. Integrated support for digital assets with traditional asset classes could attract investors that would like exposure to digital assets through an existing provider with a trusted and well-established reputation and who can conduct due diligence on digital asset service providers on their behalf.

Digital Asset Sub-Custody: Understanding the Model

One way that traditional financial institutions can enter the market is by working with trusted digital asset service providers, drawing on established expertise while learning about the industry and building out a digital asset strategy. In this piece, we explore digital asset sub-custody and how it may be a superior option for certain institutions looking to leverage the existing digital asset capabilities of an expert. A recent research engagement between Brown Brothers Harriman and Fidelity Digital Assets^SM provides the basis to explore and explain the sub-custody model.

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