The custody market for digital assets is rapidly growing with investment funds, cryptocurrency exchanges, and financial institutions all needing to use independent custodians to comply with increasing regulations around the world.
The sector hasn’t gone unnoticed by the technology giant IBM, as they’ve recently announced one of Asia’s leading enterprise-grade digital asset custodians, Hex Trust, as a Business Partner.
The traditional custody market is extremely large and is estimated at US$200 trillion of assets under custody according to FirstResearch. Currently, banking giants Bank of New York Mellon, State Street, JPMorgan, and Citigroup together oversee about 45% of those assets, according to estimates from analytics firm Trefis.
However, as we move forward towards a digitized world, an increasing number of assets will be digitized and need to be held with specialized digital asset custodians like Hex Trust.
Hex Trust’s custody solution allows access to the full breadth of digital assets, including tokens that represent a diversity of holdings such as commodities, companies, real estate, traditional currencies, and cryptocurrencies.
Based in Hong Kong, Hex Trust is a fully licensed and regulated digital asset custodian with operations in Asia and Europe. Hex Trust has built a proprietary platform that delivers a modern custody solution for financial institutions, asset managers, and corporations to safely and efficiently operate in the blockchain ecosystem.
The partnership integrates Hex Trust’s platform with IBM’s On-premise Hyper Protect Virtual Servers and Hyper Protect Crypto Services which provides the foundation for delivering enterprise-grade security, protection, accessibility and functionality designed to meet the needs of institutions entering the digital assets industry.
“Through our relationship with IBM as a Business Partner Hex Trust has hit a key milestone. Leveraging IBM’s advanced data security and protection features through IBM™ Hyper Protect Virtual Servers with the dynamic accessibility and scalability, Hex Trust’s proprietary platform will encourage regulated financial institutions to enter the space.” Alessio Quaglini, CEO of Hex Trust.
“Data privacy and protection are key concerns for enterprises and customers within the digital asset business,” highlights Ross Mauri, General Manager for IBM Z. “By taking advantage of IBM Hyper Protect Services, Hex Trust can gain the benefits provided by the security and privacy solutions underpinned by IBM LinuxONE, to establish a highly secured platform for their institutional custody solution.”
Hex Trust provide on-demand warm wallets that remove cold storage human attack vectors; bespoke and immutable risk-based approval policies for transactions, operations and administration; and support for any form of a digital asset. Beyond safeguarding private keys, Hex Safe is designed to offer trusted payments, staking, loans, collateral, corporate actions, multi-custodian settlement, and other capabilities that can provide financial returns for assets under management.
With the rise of digital platform banking, fintech companies are bringing blockchain services that seek to upend the establishment with new forms of capital formation, liquidity, and payments. Today’s assets such as stocks, bonds, securities, mortgages, treasury bills, and debentures are still difficult and costly to transfer and to subdivide. Hex Trust is helping to transform to the next generation of custody financial infrastructure for virtual currencies, securities, and new asset classes like digital wills, tokenized gold stable coins, artwork, and real property.
Hex Trust’s institutional custody solution will be secured by IBM™ Hyper Protect Services including enterprise-scale protected memory enclaves, designed with FIPS 140-2 Level 4 hardware security modules, and industry-leading data confidentiality and support for regulatory compliance through strict controls on external and privileged user access to sensitive data such as account profiles, transaction approval rules, AML ratings, KYC documentation, compliance/audit and statement data. IBM developers worked with Hex Trust, to optimize the technology for this new solution.