Yesterday SDX Web3 Services announced a strategic partnership with Fireblocks for cryptocurrency custody for financial institutions and institutional investors. SIX Digital Exchange (SDX) first launched a tokenized securities offering but unveiled its crypto-focused Web3 arm two weeks ago. It aims to enable crypto custody and staking.
The Fireblocks service will initially support key cryptocurrencies and later expand to other tokens, with the launch planned for the second half of this year. In addition to providing key storage, the solution supports transaction execution and compliance.
“At SDX we believe that digital assets and their underlying blockchain technology offer clear benefits that traditional infrastructure cannot provide,” said David Newns, Head of SDX. “SDX Web3 Services is committed to delivering a suite of future-proof solutions for institutional players as they embrace Web3.”
Going forward, SDX will integrate with Fireblocks for non custodial staking services.
One of the paradoxes of blockchain and its decentralization is that it depends on a small number of infrastructures. BNY Mellon-backed Fireblocks has its Fireblocks Network that links to more than 1,300 liquidity partners. And it looks like Fireblocks is becoming one of those few infrastructures. It even refers to its network as SWIFT for crypto.
At the recent Point Zero Forum in Switzerland, one of the audience members observed, “You have become so important to the ecosystem that we almost now have to tell clients we can’t deal with you if you’re not on Fireblocks.” He went on to ask whether Fireblocks could remove support for dodgier tokens.
This level of adoption is good news for Fireblocks, which has raised more than $1 billion in funding. The question is whether it’s great for competition in the digital asset custody space and for institutional transactions.