Chinese blockchain start-up InVault launches custodial services to corporates
In spite of China’s recent tightening of cryptocurrency trading, a Shanghai-based blockchain start-up, InVault, is taking an expectant step and offering cryptocurrency custody services.
InVault’s founder and CEO, Kenneth Xu, expects rising demand for custodial services generated by corporate and asset managers in China as many service providers primarily concentrate on retail cryptocurrency traders, according to the South China Morning Post.
The company anticipates that exchanges will want to narrow focus to matching buyers and sellers of cryptocurrencies and “avoid the moral hazard of holding clients’ assets”.
China has increased oversight and issued warnings about trading cryptocurrencies, yet it still remains popular through offshore operators. As market capitalisation of all cryptocurrencies are below $205bn, Xu expects the cryptocurrency custody business for the corporate sector to be profitable.
InVault eliminates human oversight from the custodial model to assure clients greater security of their assets. Xu added: “In conventional stock trading, securities are all held at a central depository and not by exchanges. The same should apply in the digital token arena too.”
Clients will receive a decentralised corporate cryptocurrency wallet service and private keys will be placed in a number of physical vaults with entrances accessed via a biometric recognition technology that will only allow authorised employees to enter.
InVault plans to roll out services in South Korea, Japan and Singapore in the next year.