Custodia Bank Launches Bitcoin Custody Service
08 Nov, 2023 ● Crypto News
Custodia Bank, a cryptocurrency-friendly bank founded by Caitlin Long, has launched a Bitcoin custody platform.
On November 7, the company announced the launch of Custodia Bank's Bitcoin (BTC) custody service, which is aimed at businesses such as fiduciaries, investment advisers, fund managers, and corporate treasurers.
Custodia Bank began rolling out custody in October 2023 after receiving approval from the Wyoming Division of Banking, according to Custodia founder and CEO Long.
"The regulator conducted the statutorily required pre-launch examination of us," the executive said, noting that Wyoming has specific rules that special-purpose depository institutions must follow before they can launch custody.
Custodia Bank operates as Custodia Digital Services in certain U.S. states, including Washington, Minnesota, and Texas, according to the bank's website.
In other states, such as California and Wyoming, the bank is known as Custodia Bank.
According to Long, eligible users include U.S.-based businesses in states where the bank is licensed and that meet Custodia's customer onboarding requirements.
Custodia Bank stressed that it is a non-lending bank founded by Bitcoiners that provides segregated custody accounts on its custom-built Bitcoin custody platform.
Unlike the omnibus custody model, the segregated account model for Bitcoin custody is intended to keep customers' assets separate from the company's assets, according to Custodia's white paper.
"The omnibus custody model dominates traditional financial markets, with most securities held at central securities depositories like the Depository Trust Company," it said.
It went on to say:
"We offer segregated accounts, which have superior customer protections over competing omnibus accounts that are standard offerings in the digital asset custody industry, and which commingle customer digital assets."