Bitcoin [BTC] and other cryptocurrencies get a new regulated custody body in BitGo

On 13th September, it was announced that BitGo, a cryptocurrency company planning to devise ways to fill the gap in institutional investors, has received a state trust charter to act as a custody for cryptocurrencies. Mike Belshe, the CEO and CO-Founder of BitGo stated that:

“This is the missing piece for infrastructure — it’s a treacherous environment today. Hedge funds need it, family offices need it, they can’t participate in digital currency until they have a place to store it that’s regulated.”

The move makes BitGo the first cryptocurrency company to act as a regulated custody offering specifically for cryptocurrencies. The company has also agreed to take the same route as that of a lot of other financial companies, such as: opening itself to audits, starting the common scheme of ‘Know Your Customer’ or ‘KYC’ and monthly reveals of all the company books.

Sanford C. Bernstein & Company, an investment company has also said that:

“As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms to engage in the eco-system.These include the provision of custodial and asset management services as well as traditional brokerage functions like market-making.”

The move that gives BitGo a government-backed guarantee has projected a ray of hope to users that cryptocurrencies may be en route mass adoption. Several analysts and policymakers have stated that the field of cryptocurrency is something that is mostly run by retail investors and for it to really take off, institutional investors have to come into the fore. Reports have stated that:

“Institutional investors are very interested in finding a solution, but they haven’t seen one that they think is perfect for various reasons. They still self-custody, and manage all their own keys.”

The above-mentioned report is the one that gives companies like BitGo an edge as the state trust charter instills a sense of trust and security in cryptocurrency firms. Some reports have also suggested that the company might pivot into a broker-dealer, albeit that is still in the works.

Earlier statements by experts have shown that with the coming of institutional investors into the fintech industry, the cryptosphere will boom spectacularly. With the additional assurance of protection against hacks and other nefarious activities, BitGo has allayed some fears that users have.

LeahK, a Reddi user commented:

“This is such a welcome move. I hope it is all smooth sailing from here [I know that is too much to hope lol]. Fingers crossed for better updates.”

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