As more institutional investors buy crypto currency and digital assets, the need to provide the highest level of custody and safekeeping remains essential, given their focus on counterparty risk. Their growing presence in the space also means it is becoming more important for this group to feel more comfortable with the prime service-like offerings available.
“The prime service-like elements we are putting together at Copper, and have delivered to the market so far, have changed considerably,” explains Glenn Barber, Head of Sales & Business Development, Americas, Copper.co
“We know investors want to have the best tools possible, especially in an environment that can have significant periods of volatility.”
“Against this background, investor offerings with respect to execution, clearing and settlement, even access to DeFi have become more important to make sure investors feel more comfortable that the prime services-like offerings at Copper will meet their demands and will have the required functionality.”
These developments are the fruit of heightening awareness of risk that institutional investors now have. Digital assets are virtual, bearer and global in nature and these investors now want some reassurance when making transactions, that the necessary due diligence is done on who they are trading with.
“There are unique aspects of the asset class which we need to account for,” Barber identifies, “This is the only asset class in the world where 100% of the value of a transaction is inherently at risk if what can be considered as a simple operational mistake is made. One with little to no recourse if that mistake is made”
Therefore, much of the work being done is geared towards improving transactions as institutions now require a more detailed analysis of who the participants and providers are within their own digital asset ecosystem.
Copper credits a large amount of its success to its focus in this area. “Our most basic value proposition to clients and prospective clients is that we believe we offer the absolute highest level of safekeeping for digital assets and crypto. Winning the Hedgeweek awards for Best Digital Asset Custodian and Best Technology – Custody confirms and recognises our work,” Barber outlines.
However, despite the strides being made in strengthening the infrastructure to support institutional participation in the digital assets market, Barber recognised the persistent lack a defined regulatory framework. “There is less visibility on the way forward here than most dedicated market participants would like to see. Experienced digital asset institutions are best placed to articulate and anticipate some of the unfortunate unintended consequences of hastily created regulations. A proposed framework that then allowed a period of public commentary to align both regulators and participants would go a long way.” Barber highlights.
He believes the same lack of regulatory guidance and clarity by governments to recognise this as a new asset class and create some form of sandbox environment or a temporary framework is the biggest challenge facing the digital assets market at present.
As institutional and retail adoption of crypto continues to grow globally, regulators know they will be forced to respond. However, Barber cautions against doing this too quickly: “With this being a nascent and new asset class, many results and outcomes will never actually be known until the framework is actually put into place. You don’t want it to be about trial and error. Even if you do it for the right reasons, a hastily assembled set of rules and regulations is probably not going to be the best.”
Glenn Barber, Head of Sales, Americas, Copper.co
Glenn Barber is the Head of Sales & Business Development, Americas at Copper.co. – a pioneering digital assets custody and settlement provider. Prior to joining Copper, Glenn led sales as a consultant at FalconX, an institutional digital asset brokerage, and he was also the Chief Institutional Officer at Voyager Digital, a publicly-traded holding company whose subsidiaries operate a crypto-asset platform to trade crypto assets. Glenn also has over 25 years’ experience in global capital markets and was a Managing Director in Equities at Deutsche Bank and Barclays.
