You might have heard the term ‘crypto custody’. It means securing digital assets from theft. Custodians have existed in banking for decades, but ‘custody’ for digital assets works differently.
Hi, I’m Danat. In this video, I’m going to explain what ‘crypto custody’ is and how it applies to blockchain payments. So let’s get into it.
Taking ‘custody’ of crypto really means guarding an organisation’s private keys – these are digital codes that grant access to funds in your crypto wallet.
If your business is holding digital currencies like stablecoins or bitcoin on your balance sheet, you might use a crypto exchange, a third party custody provider or software solution to secure your private keys.
But what if you’re sending and receiving payments with digital currencies – who has custody then? In this case, you might be using a payments partner, like BVNK. Your partner handles the technical details for you, keeping your digital money safe, so you can focus on running your business.
Your partner should have extensive security measures in place, including:
- multi-step verification, when accessing your account or making a payment
- encrypting payments data and passwords
- storing decryption keys offline
- and requiring multi-party signing to unlock those keys.
Your partner’s infrastructure should be continually tested, including by independent third parties.
And finally, they should apply best-in-class treasury management practices, like:
- never mixing customer funds with their own corporate funds
- and storing your funds in the same way you deposit them – so you’re not exposed to exchange rate fluctuations.
It’s also worth checking how and where your partner is licensed. Digital asset service providers in the EU for example are required by law to have controls in place for customer assets.
Here at BVNK, we store digital assets safely through a combination of our own security modules and best-in-class custody partners. Our platform is designed to keep customer funds safe, through robust systems, processes and technology. You can learn more about how we protect digital assets in our help centre and at bvnk.com/blog.
