MJ Hudson, the end-to-end solutions provider to the asset management industry, has introduced a new custody benchmarking service specifically for clients investing in digital assets.
The new service will benchmark the capabilities of major custodians for key themes across digital asset custody provision, including, but not limited to, strategy & commitment, digital asset coverage, fraud prevention, private key management, reporting, governance, legal, regulatory approvals, and custody fees.
2022 has seen a big upheaval in the investment ecosystem with the growth in digital assets. Behind this development are institutional investors increasing their exposure to the new digital asset classes. Consequently, all major custodians are spending significant resources on developing their digital asset custody platforms to meet the demand.
MJ Hudson Managing Director, Tom Robertson, commented: “With the digital asset market rapidly maturing, and with the regulatory environment in Europe and the US becoming clearer, asset managers and asset owners are moving at pace to ensure they are not left behind the curve, which has already seen leading firms such as BlackRock, Morgan Stanley and Goldman Sachs adding cryptocurrencies to their portfolios.
“As this is a fast-evolving environment, the challenge for institutional investor firms is to understand the nuances in custody between traditional and digital assets, and to adopt a robust solution that best meets their own and their investors’ requirements in safeguarding the assets against loss or theft.”
For the past 20 years, MJ Hudson’s custodian bank benchmarking team (formerly Amaces) has been supporting clients in the search and selection of custody providers for traditional assets. MJ Hudson will now work with clients and the wider market to support them in the search and selection process for firms wishing to appoint a specialised digital asset custodian.
Tom Robertson added: “There is a stark contrast in how digital assets are held in custody compared to traditional assets. By extending MJ Hudson’s existing benchmarking services, we can address an increase in demand to provide the market participants with greater confidence when considering how digital assets are held securely within the custody environment, and how to choose the appropriately qualified custodian”.
