BCG Study Puts Custody At The Center Of Banks’ Digital Asset Plans

TL;DR: A BCG study commissioned by Ripple argues that banks’ custody choices shape the digital asset services they can offer. Its modeled earnings opportunity is an illustration, while the report’s adoption estimate excludes assets on centralized exchanges. For a bank planning to move into digital assets, the custody decision can determine which products it is able to build. That is the argument in research announced by Boston Consulting Group on October 22. The study, commissioned by Ripple, estimates that more than 30% of digital assets outside centralized exchanges are held through institutional custody models. The exclusion matters: the figure is not a claim that institutions hold 30% of the entire crypto market through third-party custodians. BCG’s category also includes enterprise self-custody and wallet-as-a-service arrangements, which involve different degrees of control and outsourcing. The Choice Goes Beyond Who Holds The Keys BCG identifies several custody models and argues that banks may need a combination, depending on the services they intend to offer. The research emphasizes governance, integration and the ability to work across providers. In Ripple’s account of the ...