Last week, the Swiss Blockchain Federation published a report on the digital asset custody sector. Of the 34 institutions that responded to his survey, only one in five supports the custody of digital securities.

That could be because most of the companies cater primarily to the cryptocurrency sector. Just over a quarter have experience in traditional finance (TradFi).

“Custody to facilitate institutional adoption is crucial. In this context, it is essential to manage private keys securely,” said report author Alexander Brunner. The European Investment Bank (EIB), the most prolific issuer of digital securities, says the pressing need is for conventional custodians to also back digital assets.

A fifth of companies only serve B2C customers, 26.5% work with B2B and half target both.

The survey covered a variety of companies, including exchanges, brokers, banks, wallet providers, and technology providers.

Extensive escrow technology options

With Switzerland’s rich blockchain and crypto foundations, there are seven technology offerings available. These include the world market leaders Metaco and Fireblocks. Other high-profile providers include Deutsche Borse-owned Crypto Finance, Swissquote and Deutsche Bank-backed Taurus, which provides technology to at least five other respondents. The last two technology providers are KORE Technologies, Phoenix Systems.

73.5% of 34 respondents provide remote bankruptcy solutions, with the reminder offering self-custody or only providing technology. Four out of five of the companies have some type of license.

Three trade associations supported the report. The Capital Markets and Technology Association (CMTA) focuses on digital securities and is eager to see further adoption of its Digital Asset Custody Standards (DACS). The Swiss Banking Association believes that the missing piece of the puzzle is deposit tokens. It is working with several banks exploring the issue.

The Asset Management Association agreed with the need for a payment token, but was a bit more reserved. It is not clear if blockchain is scalable enough. And he says that many at TradFi have yet to be convinced of the benefits of tokenization when things are working fine as they are.