Buckling the belt, has begun the institutionalization of bitcoin and cryptography.
The general matter
Swissquote, a $ 618 million online banking group, announced Friday that it is partnering with Crypto Storage, based in Zug, to enable cryptocurrency escrow services on its platform. The Gland-based said that institutional investors on its platform could transfer cryptocurrencies from their external wallets to a Swissquote account and vice versa.
The measure occurred as part of the Swissquote cryptographic expansion. In 2017, the group opened a cryptocurrency trading platform, which allowed its clients to exchange the five most important digital assets, including bitcoin, XRP, litecoin and ether.
Security Anti-Nuke Crypto
Custody has been the missing link in the cryptocurrency infrastructure. From now on, cryptographic exchanges are duplicated as custodians, which not only poses regulatory problems but puts the security of assets at risk. At the same time, traditional custodians lack the experience of handling digital assets, whose security is based on keeping the private keys of wallets close. This gap has kept institutional investors away from investing in bitcoins, ether and other major currencies.
By partnering with Crypto Storage, a FinTech company, Swissquote ensures that the responsibility for the custody of digital assets falls on a company that knows how to handle the work. Crypto Storage offers a “proprietary infrastructure solution for managing private keys, both physical and digital, in higher-grade hardware security modules” that are similar to those used by the Swiss National Bank.
Because private keys can be stored as a form of physical evidence, for example, Crypto Storage has ensured that its rack servers are safe from physical attacks. The startup’s CEO, Stijn Vander Straeten, admitted that they were using military bunkers in a secret location as a shield to protect their servers. Interestingly, even a nuclear bomb can not damage those bunks, according to Straeten.
In the same announcement, Swissquote shared its plans to take its business to Asia. The group stated that it had founded a branch in Singapore and that it was going to apply for a capital market services license from the Monetary Authority of Singapore (MAS). At the same time, Swissquote will include 14 Asian exchanges on its platform for real-time transactions.
The measure suggests greater market exposure for Swissquote cryptocurrency custody and trade services. Meanwhile, the company feared that its pre-tax earnings could be reduced by approximately $ 10 million due to such expansion. It could mean that Swissquote would launch services that produce the maximum profits before those that produce less. Since the cryptocurrency is still an experimental service, it can be expected that Swissquote will launch its cryptography trading solutions in Asia at a later stage.
However, the writing is on the wall. Swissquote’s decision to expand its cryptographic solution indicates the demand of the institutional front. The company has clearly foreseen large incoming investments in this space, as well as the rest of the cryptocurrency community.
Also published on Medium.