Key Takeaways
- Institutional custody holds over 30% of digital assets outside centralized exchanges.
- Banks increasingly seek signing control, integration, and flexible deployment.
- Coordinating multiple custodians is becoming a market standard, BCG finds.
BCG Sees Up to $100 Million in Potential Bank Gains
Banks could improve their financial results by combining digital asset services with custody infrastructure suited to those activities, Ripple outlined Oct. 21. The blockchain payments company highlighted institutional custody research, which it commissioned from Boston Consulting Group (BCG). The consultancy estimates up to $100 million in potential improvement for a regional bank with a $200 billion to $300 billion balance sheet.
Custody is turning into the operating layer of digital finance while stablecoins, tokenized assets, and blockchain payments move past the pilot stage. Ripple stated:
“It enables institutions to securely govern, move and use assets across their financial workflows, not just hold them.”
Applications include issuing stablecoins designed to track an external reference value, processing payments, managing treasury holdings, and supporting lending or collateral. Supporting those services turns the business case for custody away from cost and risk control toward broader financial value creation.
Banks Seek More Control Over Digital Asset Services
BCG finds that institutional custody models now hold more than 30% of digital assets when centralized exchange holdings are excluded. Security and cryptographic key management remain essential, while institutions increasingly assess governance, approval policies, connections across blockchain networks, and compatibility with existing financial systems. Growing bot and artificial intelligence activity also increases the importance of transaction authorization controls.
Retail and payments fintechs increasingly use outsourced wallet infrastructure, while large banks license self-custody technology to build customer products. These models underpin custody infrastructure supporting tokenization and stablecoin services. The consultancy also identifies growing demand for legal signing control and flexible deployment, with coordination of multiple custodians through a common orchestration layer becoming a market standard.
Garanti BBVA Kripto, Turkish bank Garanti BBVA’s digital asset subsidiary, combines Ripple Custody with IBM technology to safeguard customer assets. Looking across the market, BCG expects consolidation to favor providers that combine financial functions, connect networks, or offer modular infrastructure: technology components that institutions can integrate separately into existing systems.
RLUSD Collateral Plans Connect Custody With Trading
Standard Chartered’s collaboration with Ripple and LMAX Group, an operator of institutional trading venues, illustrates how custody can support market access. The bank opened institutional Ripple USD (RLUSD) custody on the XRP Ledger on Oct. 12 and announced it is working with the companies to enable the stablecoin as eligible trading collateral. The custody service operates through its regulated Dubai International Financial Centre branch.
Under the planned RLUSD collateral mirroring arrangement, eligible holdings would remain in Standard Chartered’s custody while their value supports trading positions at LMAX. Standard Chartered said implementation is subject to final documentation, successful testing, applicable laws and regulations, internal approvals, and jurisdictional readiness.
