Invault, a Shanghai-based startup, has secured a new trust license from the Hong Kong financial regulator to act as a digital custodian in the Chinese special administrative region. It plans to begin offering automated cryptocurrency custodial services in December. It is also said to be in talks with a couple of “mid-sized” insurance companies to possibly add their coverage to its services.
So, what are custodial services?
Cryptocurrency custodians are third parties that store large amounts of digital assets for institutions, hedge funds, exchanges and issuers of initial coin offerings.
Companies in Hong Kong now have a new locally regulated option, which could help to increase investor confidence.
What does the founder have to say?
“We believe that globally, custodians for cryptocurrency assets will be regulated and operated under a trust license,”
Invault founder and CEO Kenneth Xu told the South China Morning Post. He also predicts that most of the demand for institutional custodian services in Asia will come from Hong Kong and Singapore.
This concept isn’t anything new, but it is new in Asia/Hong Kong. Last month the New York State Department of Financial Services granted a license to a subsidiary of Coinbase to operate as an independent qualified custodian for six cryptocurrencies. And earlier this year financial analysts warned that a lack of institutional custodians is a significant barrier to investment in the field.