Key Points
- •SEC names Ripple, Coinbase, BitGo as qualified crypto custodians.
- •The decision impacts institutional access to digital assets.
- •Ripple, Coinbase gain in regulated custody capabilities.
The U.S. SEC issued new guidance enabling companies like Ripple, Coinbase, and BitGo to serve as "qualified custodians" of crypto assets, enhancing access to digital markets.
The guidance could unlock significant institutional investment, impacting the market positively by facilitating secure custody solutions for crypto assets, including potential ETF expansions.
The U.S. Securities and Exchange Commission (SEC) issued new guidance recognizing state‑chartered trust companies like Ripple, Coinbase, and BitGo as qualified custodians. This decision expands institutional participation in the digital asset market by easing previous limitations.
Entities such as Ripple, led by CEO Brad Garlinghouse, and Coinbase, under CEO Brian Armstrong, may now offer regulated crypto custody services. The new guidance modifies earlier restrictions that were applicable to crypto asset custody. This SEC Press Release further elaborates on the implications of this regulatory update.
This ruling potentially increases institutional inflows into digital assets, particularly for Bitcoin, Ethereum, and altcoin ETFs. By reducing operational barriers, the SEC aims to facilitate broad institutional engagement in the crypto space.
Financial impacts include significant expansion of custody options for registered investment products. As qualified custodians, these entities will now support secure and compliant institutional crypto transactions, affecting ETFs and DeFi applications. Mark Uyeda, SEC Commissioner, noted, "Allowing state‑chartered trust companies to qualify as custodians recognizes existing safeguards and leverages trusted financial infrastructure for digital assets." Source
Historical precedents include previous SEC guidance and similar moves by the OCC, which had traditionally restricted crypto custody. The SEC's guidance is part of an ongoing trend to incorporate crypto into the regulated financial system. Further details on similar legislative actions can be found in the OCC Interpretations and Actions Report.
The decision may lead to heightened demand for custodial services from these accredited companies. As regulatory environments adapt, more institutions could seek fully compliant options for custody solutions, benefiting entities like Coinbase and BitGo. Information about safeguarding client assets can be reviewed in the Advisory on Safeguarding Client Assets.