Following the rollout of Coinbase Custody, another large cryptocurrency company Fusang Investment Office announced the upcoming launch of a secure cryptocurrency storage.

Everyone familiar with cryptocurrency market is aware of an inherent high volatility environment as when it comes to the price of digital assets, Bitcoin’s rollercoaster perfectly illustrates major price swings taken place within the industry. Today the king of cryptocurrency once again is gaining momentum, however, investors who have been through a living nightmare, now desperately need a safe cushion for their funds.

Therefore, cryptocurrency custody services are in high demand since both institutional investors and wealthy individuals feel more comfortable with the safe custody of their assets provided by banks and financial institutions. Unlike banks that until today do not show any interest into this vacant market niche, investment firms and exchanges are creating cryptocurrency custody services to meet the sheer demand.

Early in the month, Coinspeaker reported an infamous cryptocurrency exchange Coinbase launched a new custody service available for all institutional players and businesses. According to the exchange’s announcement, Coinbase Custody is expected to bring a safe and secure storage of digital assets for institutional hedge funds and other big institutional contributors who are willing to invest huge sums into the cryptocurrency space.

The crypto community has immediately responded to a risk-mitigating service of Coinbase in a very positive tone that, in turn, boosted the development of similar cryptocurrency storages. The last to introduce a crypto-custody service was an Asian asset management firm Fusang Investment Office.

The firm, which usually focuses its operations on private family offices in Hong Kong, Singapore and Malaysia, is set to launch a crypto asset custody service called Fusang Vault. The Fusang CEO Henry Chong said the new custody service would be live for the fourth quarter of 2018.

Comparing digital assets to financial bonds, Chong noted the increasing need to provide an independent third party that would hold clients’ crypto assets, just like a demand for custodian bank services in conventional finance.

Chong stressed that since holding digital assets lacks the registration of ownership data, a crypto-custodial service is of “paramount importance”:

“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.”

Nevertheless, there are some concerns over this business model that fuel anxiety among the community. In contrast to a Coinbass crypto-custodian solution operating in accordance with the U.S. Security and Exchange Commission (SEC), Fusang crypto custody is not regulated in Hong Kong. Funang Vault users are solely dependent on the terms and conditions in the service contract in the event of any losses.

With no regulation of custody services, clients need to rely on the service providers’ goodwill primarily. Considering the splash of swindles and attacks within the industry, a complete absence of formal rules is not something most clients will be happy about, thus there are still some issues to work out prior to the launch of Fusang Custody service.

Yet it is expected more of these services like Coinbase and Fusang Custody will come to market soon while the entry of reliable crypto custody services into the market will have a large positive effect on investment, particularly from risk-averse financial institutions, which have historically viewed cryptocurrencies with suspicion.

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