Today Vontobel, the Swiss-based investment bank that provides conventional custodial services, announced ‘Digital Asset Vault’, an end-to-end service for digital assets aimed at wealth managers, banks and asset managers. The software allows users to give instructions for the purchase, custody, and transfer of digital assets quickly and securely, all within the banking infrastructure, similar to traditional asset types.
Vontobel claims to rank third in Switzerland for providing b2b services for custody and execution. The company is listed on the SIX stock exchange with a market capitalisation of CHF 3.1 billion.
The demand for digital products and services has been growing among financial intermediaries. At the same time many believe the lack of institutional-grade custody solutions has held back adoption.
Vontobel is one of the first companies in the market to provide a solution that meets the security standards required by big regulated institutions. By combining its experience in protecting digital products with security based on Hardware Security Module (HSM) technology, it created a solution fully integrated into its banking infrastructure.
The company aims to enable other financial intermediaries to be able to offer end users a full solution for digital assets, without requiring a major infrastructure investment. By doing so, retail clients don‘t need to register with digital asset issuers or other cryptocurrency exchanges, and they can delegate the safeguarding of private keys. Hence clients can transact with digital assets through their banks. Additionally, the solution provides reports that can be used for tax purposes.
The path to institutional safe custody
In the field of digital assets, there are two distinct groups, the current and future. Firstly, there‘s cryptocurrencies and securities tokens where institutional grade custody solutions are needed for large scale institutional adoption. Last year Fidelity announced the formation of Fidelity Digital Asset Services targeting the institutional segment for cryptocurrency custody and trade execution. Vontobel‘s solution sounds somewhat similar.
The second aspect of digital assets is when mainstream equity, debt, and derivative markets adopt blockchain tokenization at scale. ConsenSys incubated Trustology has started to offer institutional grade custody solutions, currently targeted at cryptocurrencies but with an eye to mainstream markets tokenizing in the future. They too provide an HSM solution.
In Switzerland, SwissCom provides services to many Swiss banks and in December launched its blockchain solutions.