Sunday, June 16, 2019

IBM Explores Crypto Custody Following Fidelity’s Bitcoin Soft Launch

The year 2018 will always be remembered as the year Bitcoin (BTC) had its worst performance, so far, falling by more than 70%. Institutions and several traditional industries seem not to be fazed by its past record, as they continue to push for a bite of the crypto apple. IBM, a blockchain-friendly company, has reportedly gone into cryptocurrency custody with a little-known partner.

March Births the Custodial Services

The outlet’s Ian Allison notes that custodial services for the innovative asset class will be launched towards the end of March by Shuttle Holdings, an investment group based in New York. Allegedly the offering has been built by shuttle on IBM’s private cloud service and is supported by encryption technology. The shuttle will not be handling the basic elements itself; instead, it is offering the tools for the cryptocurrency custody.

As is the practice among institutional players in this space, Shuttle has set its sight on just a few clients that it believes will be able to overcome cryptocurrency stress. In the end, the company hopes to see many more institutions explore the storage of cryptocurrency.

The Venture Not A Cold Storage

The collaboration between Shuttle and IBhttps://btcnn.com/tag/ibm/M cannot exactly be referred to as cold storage. A vault will not be used in the storage of private keys; rather the keys will be stored in the cloud and safeguarded by layers of industrial-grade encryption. Shedding more light on the project, Shuttle’s Brad Chun said:

“There are always trade-offs between security and efficiency, but we do not utilize a traditional cold storage system. Instead, we keep keys at rest encrypted in multiple layers as data blobs so that an organization can store these backups using their pre-existing disaster recovery and backup processes and media.”

Custody Is Becoming Increasingly Popular

This only emphasizes the trend of custody of digital assets in the industry. In previous reports, it was established that Fidelity Digital Asset Services (FDAS), the first full-fledged digital assets platform supported by Wall Street, has officially gone live. In some interviews that held this week with cryptocurrency outlets, Tom Jessop, a former executive at Goldman Sachs and now head of FDAS, explained that the services his brainchild is offering is only for a carefully selected list of “eligible clients.” At the moment, Jessop added, the platform will only support Bitcoin, and will hold off on its decision concerning Ethereum due to the forthcoming blockchain upgrades.

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