Regulation in the cryptocurrency and Blockchain space has been one of the hotly debated topics. Financial companies especially those in the banking industry have criticized the digital currency market for the lack of oversight.
The lack of regulation has been one of the major drawbacks of the cryptocurrency market and it is partly to blame for rogue initial coin offerings (ICOs) through which millions have been lost. The absence of regulation is believed to be holding back digital currencies from breaking into the global financial market. However, there is some hope for regulation in the future.
Regulated crypto custody might be the long-awaited solution for the regulatory problem surrounding digital currencies. Kyle Samani, a hedge fund manager and managing partner at Multicoin Capital is one of the few investors that have been testing a new crypto-custody service on the Coinbase cryptocurrency exchange.
?There are a lot of investors where custodianship was the final barrier. Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital,? stated Samani.
The dawn of regulatory measures for cryptocurrencies
Coinbase is seeking regulatory approval so that it can soon start providing the service to its customers. However, it has to meet strict regulatory standards for guarding assets in the U.S. Coinbase is one of the cryptocurrency exchanges that have been in talks with regulators to try as part of their efforts to try and streamline the cryptocurrency market.
The focus on regulated crypto custody seems to be gaining traction among companies in the blockchain industry. A global financial services firm called Nomura is now providing institutional-level custody services for digital assets. Another company called BitGo recently acquired a $12 billion asset manager called Kingdom Trust to act as the custodian for its assets.
Regulated custody services might be the missing link that will help bring institutional investors into the digital currency market. If this happens, it will provide opportunities in the stock market without requiring personal responsibility for the custody of funds.
Regulated custody will also help prevent accidental losses and outside theft while at the same time acting as an insurance policy that will protect billions of funds traded on a daily basis.
Disclaimer: Nothing in this article should be construed as financial advice in any way, nor as an encouragement to engage in cryptocurrency trading activity. This article was not sponsored by any entities or companies mentioned in the article. The only purpose of this article is to inform/educate on the topics discussed in the article.
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