- •Ripple and Coinbase eligible as custodians for crypto assets.
- •SEC recognition enhances institutional participation in crypto.
- •Potential for increased assets under management.
Ripple and Coinbase now qualify as crypto custodians under new SEC guidance, enhancing access for institutional investors. This decision, backed by a no-action letter, recognizes state-chartered trust companies as eligible custodians for digital assets like BTC, ETH, and XRP.
The SEC's decision signals expanded custodial options, providing a pathway for increased institutional confidence and potential capital inflow into the crypto sector.
Expanded Custodial Options
The SEC, through a no-action letter on September 30, 2025, recognized specific state-chartered trust companies, including Ripple and Coinbase, as qualified crypto custodians. The action clarifies eligibility criteria and expands regulated custody options for digital assets. Brian Daly, Director of the SEC Division of Investment Management, noted the need for clarity for state-chartered entities previously uncertain about their custodial status.
"This additional clarity was needed because state-chartered trust companies were not universally seen as eligible custodians for crypto assets." — Brian Daly, Director, SEC Division of Investment Management
Ripple and Coinbase can now offer custodial services under updated regulatory criteria, alongside others like BitGo and WisdomTree. This status shift allows broader asset managers to utilize state-chartered custodians for crypto assets.
Impact on Financial Markets
Financial markets may see increased institutional engagement with the established custody services by Ripple and Coinbase. The decision affects assets including BTC, ETH, and XRP, providing heightened regulatory assurance.
The financial implications include potential growth in institutional investment and management of cryptocurrency assets. Importantly, this development could encourage larger inflows and greater market stability as custodianship options expand.
The acknowledgement of state-chartered trust companies as qualified custodians represents an evolution in U.S. regulatory guidance, aligning crypto custodianship standards with those of traditional financial assets. The move supports broader adaptability within the evolving digital asset landscape.
Implications for Institutional Investors
This regulatory change is poised to influence institutional investor strategies, possibly leading to increased AUM for state-chartered entities. As institutional interest grows, stakeholders might see technological advancements and enhanced security measures in custodial services.