Digital asset custody reshapes how banks compete in tokenized finance

Digital asset custody has crossed a threshold. What was as soon as a technical afterthought – the safe storage of personal cryptographic keys – is now a strategic functionality that determines how banks and monetary establishments place themselves throughout a quickly altering panorama, in accordance with a report from Boston Consulting Group (BCG),

The report, Beyond Safekeeping: Custody because the Operating Layer Beneath Digital Finance, was commissioned by digital development projects firm Ripple and finds that greater than 30% of digital belongings held exterior centralized exchanges at the moment are below institutional custody fashions. As banks increase into tokenized belongings, stablecoins, and blockchain-based funds, the custody development projects an establishment selects is more and more the variable that separates these in a position to compete in digital finance from those who can not.

“Digital asset custody is now not merely about defending belongings. It is popping into the layer that each different digital finance service runs on,” mentioned Tibor Merey, a managing director and associate at BCG and co-author of the report. “Banks must suppose past safekeeping and think about how their custody development projects can assist new merchandise, enhance operational effectivity, and create further sources of proceeds.”

For monetary advisors and wealth managers, the shift has direct implications. As advisor allocations to crypto reached an all-time high in the 2026 Bitwise/VettaFi benchmark survey, demand stress is constructing on the establishments behind the platforms advisors use. Custody choices made on the financial institution or custodian degree now move immediately into what providers advisors can provide purchasers.

Security has change into the ground, not the ceiling

The report highlights a shift in what establishments really consider when deciding on custody suppliers. Under frameworks similar to MiCA in Europe and the GENIUS Act within the United States, cryptographic safety and private-key administration have successfully change into desk stakes – the minimal required to function, not a foundation for aggressive differentiation.

Institutions at the moment are evaluating suppliers on what sits above that safety baseline: enterprise-grade governance and coverage controls, interoperability throughout networks, and integration with current monetary development projects. The report additionally flags a more recent dimension to the safety dialog: rising bot and AI-driven exercise is making transaction approval and verification governance simply as necessary because the cryptography underlying the system.

That level is underscored by the theft figures. More than $3.4 billion in digital belongings was stolen in 2025, in accordance with BCG, and the report’s evaluation of three safety incidents spanning 2024 to 2026 means that losses typically resulted from weaknesses in governance and approval processes reasonably than failures in underlying cryptographic programs.

Four fashions, one strategic alternative

The BCG report identifies 4 distinct custody fashions at the moment in use: enterprise self-custody know-how, wallet-as-a-service, managed custody, and non-custodial wallets. Each carries completely different implications for working prices, management, legal responsibility, and proceeds potential.

Wallet-as-a-Service is gaining traction amongst retail- and payments-focused fintechs, whereas bigger banks are more and more licensing self-custody know-how and constructing shopper merchandise immediately on prime of it. A 3rd mannequin is the built-in, or “one-stop store,” strategy – the place custody, settlement belongings, cost rails, treasury, and execution are bundled below a single supplier, lowering the necessity for separate integrations throughout every perform.

Rather than locking right into a single mannequin, the report recommends that establishments think about combining approaches primarily based on their particular corporate affairs actions. BCG finds that combining a number of custodians behind a standard orchestration layer is changing into a market normal, with interoperability and constant coverage controls throughout suppliers rising as essential choice standards.

From value middle to proceeds engine

The monetary case for getting custody technique proper is the report’s sharpest argument for govt consideration. BCG values the whole addressable custody market at roughly $1.4 trillion to $1.6 trillion as of July 2026, in accordance with reporting on the report’s findings, encompassing alternate balances, self-custody, wallet-as-a-service, and managed custody.

The proceeds alternative extends nicely past safekeeping charges. Custody underpins providers similar to tokenization, stablecoin issuance, funds, treasury, lending and collateral administration – shifting the corporate affairs case from value and threat administration towards lively monetary worth creation.

BCG’s illustrative evaluation finds {that a} regional financial institution with $200 billion to $300 billion in belongings might generate roughly $80 million to $100 million in profit-and-loss upside by pairing sound custody choices with 5 digital asset use instances.

Advisors navigate a altering development projects panorama

The BCG findings land at a second when the advisor neighborhood is deepening its engagement with digital belongings, whilst institutional development projects works to maintain tempo. The 2026 Bitwise/VettaFi survey found that 32% of advisors allocated to crypto in client accounts last year, up from 22% in 2024, with 99% of these allocators planning to keep up or improve publicity.

Stablecoins and tokenization attracted 30% advisor curiosity as rising themes, suggesting that the custody development projects dialog will more and more attain advisors’ desks reasonably than staying confined to institutional operations groups.

InvestmentNews has tracked the rising advisor engagement with digital asset methods together with the regulatory developments – from the SEC’s Bitcoin ETF approvals to the GENIUS Act’s stablecoin framework – which might be redefining what advisors can custody and advocate on behalf of purchasers.

Consolidation and longer-range dangers

BCG expects custody suppliers that supply solely fundamental safekeeping to face growing stress as standardization compresses margins. The report identifies three supplier archetypes rising to seize the following stage of the market: vertically built-in platforms that bundle custody with stablecoins, funds, and treasury; community aggregators that join establishments throughout shared development projects; and modular suppliers that embed custody know-how immediately into banks’ current core programs.

Two longer-range dangers add urgency to institutional planning. Approximately 30% of Bitcoin provide is held at addresses with publicly seen keys, in accordance with BCG, creating potential publicity if sufficiently succesful quantum computer systems emerge. The report additionally raises unresolved questions round legal responsibility for funds initiated by AI brokers performing below delegated authority – a problem that carries direct penalties for the way establishments construction digital asset governance going ahead.

“The establishments that profit most from digital belongings might be those who make custody choices primarily based on their broader corporate affairs technique, reasonably than treating custody as an remoted know-how buy,” mentioned Bernhard Kronfellner, a associate and affiliate director at BCG and co-author of the report. “Banks want development projects that may accommodate completely different custody fashions, combine with current programs, and adapt to altering regulatory and operational necessities.”

For advisors, the sensible query is how shortly these institutional shifts translate into better-integrated, extra clear providers. As custody strikes from the operations division to the boardroom, wealth managers finest positioned to serve digital asset purchasers might be those that perceive the development projects layer their choices are constructed on.

The full BCG report is offered at ripple.com/lp/bcg-report-2026