STP Global


Digital Custody & Cross Border Payment

Digital or Crypto Custody refers to the safeguarding of cryptocurrencies for individuals or institutions. Much like a bank keeps money safe, a crypto custodian securely stores digital assets.

Here are the key aspects of Digital Crypto Custody:

  1. Secure Storage: Crypto assets are stored in a manner that mitigates the risk of theft. This typically involves using secure, offline storage methods, often referred to as cold storage. Advanced cryptographic techniques are used to ensure the safety of the private keys which control the assets.
  2. Key Management: Managing cryptographic keys is a critical aspect of crypto custody. This involves not only the secure storage of keys but also their safe use, recovery, and deletion. Mismanagement of keys can lead to loss of access to the digital assets.
  3. Compliance and Regulation: Crypto custodians are often regulated financial institutions. They need to comply with legal and regulatory requirements, including Know Your Customer (KYC) and Anti-Money Laundering (AML) rules. In some jurisdictions, institutions involved in activities like asset management may be legally required to use a regulated custodian.
  4. Asset Transfers: Crypto custodians can assist with the secure transfer of digital assets, helping ensure that transactions are valid and funds are delivered to the correct addresses.
  5. Audit and Reporting: Crypto custodians provide reporting services to their clients. This can assist clients in understanding their holdings and meeting their tax and regulatory reporting requirements.
  6. Insurance: Some crypto custodians provide insurance coverage for the digital assets they hold, providing additional protection for their clients.


Institutions like hedge funds, asset managers, and exchanges often use crypto custodians because they need to manage large amounts of digital assets securely and comply with regulatory requirements. Crypto custody solutions are also being developed for retail customers who want to ensure their digital assets are safe.

Cross-border payments facilitated by blockchain technology offer numerous benefits compared to traditional banking systems. Here are several reasons:

  1. Speed: Blockchain transactions can occur in near real-time, even when they cross national boundaries. Traditional bank transfers, on the other hand, may take several days, particularly for international transactions.
  2. Reduced Cost: Cross-border transactions often involve hefty fees, charged by both the sending and receiving bank, as well as any intermediary banks. Blockchain can significantly reduce or even eliminate these fees, making transactions more cost-effective.
  3. Transparency: Blockchain transactions are typically more transparent than traditional methods. All parties can view transaction details, and once a transaction is recorded, it cannot be altered or deleted. This provides a reliable audit trail and reduces the chance of fraud.
  4. Accessibility: Banks and other financial institutions are not available to everyone, particularly in developing countries. Blockchain technology, however, can be accessed by anyone with an internet connection, allowing more people to send and receive money internationally.
  5. Security: Blockchain uses cryptography to secure transactions, making them highly secure. Furthermore, the distributed nature of the blockchain means there is no single point of failure, adding another layer of security.
  6. Efficiency: By eliminating the need for intermediaries, blockchain can streamline cross-border payments, making the process more efficient.
  7. Currency exchange: Blockchain and associated cryptocurrencies can bypass the need for currency conversion, reducing costs and complexity in cross-border transactions.
  8. Traceability: With blockchain, every transaction is recorded on a block and across multiple copies of the ledger that are distributed over many nodes (computers), making it highly traceable.


Despite these advantages, it’s also important to note that regulatory, legal, and technical hurdles still need to be addressed for wider adoption of blockchain technology for cross-border payments.