An asset management firm from Hong Kong is preparing to launch a cryptocurrency custody service. The Fusang Vault, as the service will be called, is the brainchild of the Fusang Investment Office.
Fusang Vault Will Provide Custody Services for High Net-Worth Individuals
The Fusang Vault is expected to be launched in the fourth quarter of this year. The CEO of Fusang Investment Office, Henry Chong, told the South China Morning Post of the importance of third party custodian services for cryptocurrencies.
According to the executive, such firms should be able to store assets for clients, as well as to provide auditing services. Henry Chong told the publication:
“Digital assets are akin to bearer bonds, whereby whoever that is holding the security is presumed to be the owner and there is no registration of ownership information of the security. Hence, the way we keep digital asset secured is of paramount importance.”
Fusang Investment Office is an asset management company that largely focuses on Asian private family offices. According to its website, the firm is regulated by the Monetary Authority of Singapore (MAS) and licensed by the Securities and Futures Commission of Hong Kong.
Precise details of the Fusang Vault are still unknown since Chong did not provide extensive comment on the operation of the forthcoming custodial service. However, the CEO did state that Fusang were working with various insurers who would provide coverage for the digital assets of their clients.
Elsewhere, cryptocurrency brokerage Coinbase has also been exploring custody solutions for cryptocurrencies and virtual assets. Coinbase Custody was recently launched with the goal of attracting institutional investors by offering them a “white glove”-style service. Only those with balances of over $10 million will be eligible for Coinbase’s latest offering. The company will then charge $100,000 for setting up the service and 0.1% of each client’s balance for continued use of Coinbase Custody.
In their first week of operation, Coinbase Custody accepted the applications of ten different institutional clients who met the necessary criteria and were seeking cryptocurrency storage.
The report in the South China Morning Post states that more custodian-type services are needed for institutional players to enter the digital currency market. This is because various asset managers are keen to trade crypto, but are unsure of how to correctly store it being as proper security of digital assets is unlike anything they will have encountered previously.
It’s hoped that once the infrastructure of the cryptocurrency space develops sufficiently, many more institutional investors will feel comfortable entering the market. Initiatives like the Fusang Vault and Coinbase Custody are a vital step in appealing to such high net-worth investors.