Beyond Storage: How Custody Is Evolving to Meet Institutional Needs

Diogo Monica is president and co-founder of Anchorage, crypto's premier custodian for institutional investors.

We're grateful institutional investors who know crypto best are helping to inform the development of our custody product.

Institutional investors want custodians to make buying and selling digital assets as easy and painless as possible.

Cold storage isn't working for institutional use cases.

To counteract the risks of online exposure, custodians have attempted to secure assets by generating and managing keys entirely offline through a manual human process called "Cold storage." Holding assets offline is necessary for security purposes, but institutional investors are frustrated with cold storage as it has traditionally been implemented.

Cold storage comes with serious usability constraints, and institutional investors have complex usability needs that cold storage simply cannot satisfy.

Institutional custody providers must develop solutions that make offline assets easily accessible and securely tradeable.

As more projects come to market with mechanisms requiring active participation, institutional investors, which have a major stake in their investments' health and success, will rely on their custodians to act accordingly and get the most out of their holdings.

We believe institutional intent is best verified by authenticating each human approver for a given operation, not just verifying possession of a shard or user key; and by enabling institutional investors to configure customizable quorums based on the nature of the operation, since different team members may have different domains of authority.

Institutional investors have different needs than retail users, while new coins that offer staking and governance demand on-chain participation.