Tech conglomerate IBM has partnered with METACO a digital asset security company in order to create enterprise-level digital asset custody solutions for banks and financial service firms.
According to a press release on Thursday, METACO will use IBM Cloud and IBM Cloud Hyper Protect Services for its digital asset management system and cryptocurrency custody solutions. METACO can deliver its traditional finance clients benefits including increased security and scalability as they adopt hybrid cloud strategies.
Firstly, transaction-centric banks want to offer crypto assets to their customers, and secondly, firms want to tokenize traditional assets, and plug them into the DeFi.
Paul Brody, blockchain lead at EY
Financial Services Need to Ensure The Safety of Their Customers
According to SEC regulation promulgated as part of the Dodd Frank Act, institutional investors that have customer assets worth more $150,000 are required to store the holdings with a “qualified custodian”, and organisations such as METACO are filling in the services to bridge regulatory gaps.
Our multi-custodian solution allows them – with a single integration into their basic infrastructure – to transparently manage and diversify risks between multiple custodians, all within a holistic risk management and control framework.
Seamus Donaghue, vice president of strategic alliances at Metaco
Highly regulated financial service firms and banks that want to take part in the digital asset ecosystem will need proper infrastructure and security to ensure the safety of their customers. Since banking is the biggest client industry sector at IBM it’s the natural infrastructure choice for most banks and large financials looking for a foothold in the growing digital asset space.
As companies such as METACO continue to help the world’s top banks and exchanges manage their digital assets, IBM’s confidential computing capabilities help its clients ensure their data and processes are managed securely, bringing trust into the ecosystem and providing privacy assurance.
Hillery Hunter, IBM fellow, vice president and the chief technology officer of IBM Cloud
METACO has been the chosen digital asset custody provider for various financial institutions in Switzerland and other European countries. Having provided their services to megabanks such as Standard Chartered, BBVA and the Swiss-based division of Russia’s GazpromBank.
Kingdom Trust, a Kentucky-based custodian, was the largest such service for cryptocurrencies until it was purchased by BitGo, a San Francisco-based startup. Goldman Sachs and Fidelity have also recently diversified into this branch by launching ETFs. As regulation around cryptos start to clear up major financial firms and banks are getting more involved in the cryptocurrency ecosystem.
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