Capital markets News

Fireblocks plans to become New York custodian. Launches custodian partner program

fireblocks digital asset custody

Today Fireblocks announced the planned launch of the Fireblocks Global Custodian Partner Program for licensed global custodians. This will enable clients using the Fireblocks Network to access multiple custodians. In addition Fireblocks announced it has applied to the New York State Department of Financial Services (NYDFS) for a limited purpose trust charter to provide cold storage for digital assets.

Fireblocks plans as a regulated custodian

While Fireblocks is known for its security and custody technology, it is not a regulated custodian. Hence, its application for a trust charter might appear to compete with clients and even investors such as BNY Mellon, the world’s largest custody bank. Its deal with BNY Mellon put the company on the industry map in 2021.

However, banks in the United States are currently locked out of providing crypto custody. That’s despite a resolution passed in Congress this week to overturn the SEC SAB 121 rule preventing banks from providing digital asset custody. The White House has vowed to veto the resolution if the Senate also votes in favor. 

It’s often highlighted that the crypto that underpins the hugely popular Bitcoin ETFs is not held in custody by banks. Most of it is held by Coinbase Custody and Fidelity Digital Assets Services, which both hold NYDFS trust charters.

Additionally, competitors with licenses are able to provide custody solutions in the United States. The SEC has proposed tougher safeguarding requirements for registered investment advisors (RIAs), and others have launched solutions to address this.

Fireblocks is particularly targeting RIAs, asset managers and ETF issuers, as well as other institutional participants.

Global Custodian Partner Program

Apart from custody technology, a larger part of Fireblock’s business is now the Fireblocks Network, which connects to exchanges, on and off ramps, staking, and many other services. Several custodians are already integrated with the Fireblocks Network to enable their clients to access these services. They include institutional custodians such as Standard Chartered’s Zodia Custody and Nomura-backed Komainu.

Hence, the Fireblocks Global Custodian Partner Program appears to be formalizing this process.

It plans to go live with the partner program during the current quarter in the United States, the United Arab Emirates, the United Kingdom, Singapore, Thailand, and Australia. 

Update: edited the paragraph regarding competition making it more succinct