Prime Trust, a U.S. financial institution that had previously played a pivotal role in multiple dollar-backed cryptocurrencies, is entering the disruptive crypto custody business.
The trust company, based in Nevada, began providing cold storage for bitcoin from mid-July, and also plans to announce that it can also handle custody for ether and any token issued on the Ethereum blockchain under the ERC-20 standard.
Services Provided by firms such as Prime Trust, are in high demand in the market amongst institutional investors, despite the bearish market find returns in crypto assets alluring, but don’t want to be bothered of protecting the private keys to a digital wallet and/or are required by law to use a required custodian. In cold storage, these cryptographic keys are kept offline, on a secured hardware wallet or on paper that’s typically locked away in a safe.
Lately, many big players in financial services are entering this market as well, with Northern Trust,Rothschild, Goldman Sachs and Intercontinental Exchange (ICE), the parent firm of the New York Stock Exchange, all looking to offer institutional-friendly crypto solutions. Crypto startups like Coinbase, BitGo, and Ledger have also been an active participant in this market.
But Prime Trust says that as a two years old startup launched with an all-new innovative bend in their technology, it can outmaneuver the big players. Referring to Northern Trust’s testing period and the uncertainty over when Goldman will come out with a custody product, Scott Purcell, Prime Trust’s CEO, stated officially,
"They are trillion-dollar Fortune 100 entities, and they are just not going to move that fast.”
Prior to its custody announcement, Prime Trust was known in the crypto space for its back-office role in the so-called stablecoin by IBM and startup Stronghold. The token was issued on the Stellar blockchain and was backed one-for-one with U.S. dollars that Prime Trust deposits at federally insured banks where it already has relationships. As per Purcell, they are providing this service to 10 similar projects.
Purcell also claimed that his company would be the first to offer custody for any ERC-20 tokens, which he described as not a small feat.