Opportunities in digital assets and digital custody: Tracking the modernisation of standard custody offering

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Abstract: Digital assets are a new asset class whose adoption necessitates a transformation of custody similar to the transition from paper-based securities to a fully dematerialised securities system. This paper explores how traditional custodians can manage this transition in a proper way and employ distributed ledger technology to increase the efficiency of their operations and to provide digital asset and traditional services in an integrated way. Starting by describing the status of custody, the paper then describes the opportunities and challenges of blockchain-based digital asset custody and elaborates on the proper ways of integrating the novel platforms and processes in the business model of a traditional custodian. On this basis, a framework is developed for a future integrated custody service.

Keywords: digital assets, digital custody, blockchain, key management, tokenisation

Radoslaw (Radek) Ignatowicz is a senior director and product owner of Custody in Raiffeisen Bank International Global Investor Services Division in Vienna, where he is responsible for custody product development, participating in digital assets and digital custody strategy design. He has over 30 years of experience in the custody business.

Alfred Taudes has been Professor at the Vienna University of Economics and Business Administration (WU) since 1993. He was the coordinator of the FWF Special Research Area 10 Adaptive Models in Economics and Management Science, Head of the WWT project Integrated Demand and Supply Chain Management, and has been awarded the Science Prize of the City of Vienna and the Best Paper Award of the Association of University Teachers of Business Administration.