Ripple Advocates Four Best Practices for Digital Asset Custody
Ripple executives highlighted the importance of digital asset custody for institutional adoption in a recent blog post. Key points include:
- Custody as a foundation for stablecoins, tokenized assets, and cross-border settlements.
- A Ripple–Boston Consulting Group report forecasts the tokenized real-world assets market could reach $18.9 trillion by 2033.
- More than half of firms in Asia Pacific plan to adopt custody solutions within three years.
- The "Custody & Cybersecurity" workshop with Blockchain Association Singapore focused on best practices for stablecoin custody.
Four guiding principles for custody design were outlined:
- Compliance-by-design: Adhering to asset segregation and recovery protocols.
- Choice of custody models: Options include third-party, hybrid, or self-custody.
- Operational resilience: Workflows must withstand disruptions and meet regulatory benchmarks.
- Governance: Essential elements include segregation of duties and independent oversight.
The workshop emphasized the role of custody in mainstream use cases such as trade finance and liquidity management. Ripple advocates for enterprise-grade custodians to support this transition through advanced features like API integration and AML tools.
Ripple's products, including the Ripple USD (RLUSD), are designed with compliance and operational standards in mind. The executives concluded that advanced custody infrastructure will be crucial for the future of digital finance, integrating smart contracts and automated compliance.