Category Archives: custody

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Canadian Digital Safety Deposit Box Launches for Crypto Firms

Canadian bank VersaBank announced on Thursday that its digital safety deposit box is ready for use by cryptocurrency firms.

The VersaVault project is “initiating commercialization of its services” after successfully completing beta testing, a press release reports. The custody solution can be used to “securely” store cryptocurrency assets, while the bank says it will also provide multi-signature services for digital currency investment funds and exchanges.

According to VersaBank’s Director of Investor Relations Wade MacBain, VersaVault has already prompted over 200 inquiries.

MacBain has emphasized that alongside top security, clients can also ”enjoy absolute privacy”, with the bank unable to access or view funds in a clients account; the account holder is the only entity capable of accessing or knowing what is inside their digital storage facility.

Despite producing a significant product in terms of secure cryptocurrency storage solutions, VersaBank is far from a leading financial institution in terms of size. After becoming the world’s first branchless, electronic only bank in 1993, it remains Canada’s smallest bank in terms of asset size.

Major banks have shied away from the still risky business of releasing a cryptocurrency custodial solution, with some pundits saying a secure storage product will entice more institutional investors into the cryptocurrency market.

”While many are considering ideas and plans for a digital safety deposit box, we have designed and built it,” said David Taylor, President and CEO of VersaBank.

The project was first announced in January, with two beta users signed on in March for the final stages of testing.

Gurpreet Sahota, former lead architect of cybersecurity at Blackberry, joined the project shortly after its announcement in January and has spearheaded the security aspects of the project since.

 

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Mike Novogratz: Institutional Investments in Bitcoin During Q1 2019 to Bring New Highs

Notorious Bitcoin bull and seasoned investor Mike Novogratz no longer stands by his USD 10K Bitcoin price prediction for 2018, instead suggesting that institutional investors may push it to that total early next year.

Novogratz’s comments came in a Bloomberg Television interview where he defended his previous prediction, saying the cryptocurrency process has been a learning curve with everything taking ”longer than expected.”

He compared the whole crypto ecosystem to a fourth grader being expected to materialize into a graduate. One of the issues Novogratz pointed to is the need for internal committees and testing to solve custody problems that leave investors ”screwed” if anything illicit happens to their assets.

The conversation turned to Fidelity Investment’s announcement of a ”world-class custody solution,” to quote Novogratz, aimed at institutional investors. Considering cryptocurrencies as bare financial instruments, this class of investors has been held back from entering the market due to uncertainty surrounding the storage of cryptographic keys that allow access to the assets

Fidelity is offering them insurance that they can place their bets with cryptocurrency knowing that they won’t lose their money in an illicit way.

Combined with Goldman Sachs’ crypto custody solutions in the works, Novogratz believes that ”slowly but surely institutional investors are becoming more comfortable with the whole asset class.” As he reasons it, the institutional flow of capital can be expected in Q1 of 2019, or early Q2.

Being a Bitcoin trader himself, Novogratz has shared that right now, he is going long. In defense of Bitcoin’s mid-week stumble last week, he argued that it is still a young asset that certainly is not without volatility. Meanwhile, he stands firm on his belief that it is a valuable store of value, particularly in countries facing economic crises such as Iran and Venezuela.

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