IBM Enters Digital Asset Custody Market, Designs Tech for Banks

A New York investment firm, Shuttle Holdings will launch the beta version of a custody solution for digital assets and cryptocurrencies built on IBM’s encryption technologies and private cloud, later this month. Notably, the companies won’t be storing digital assets and tokens themselves. Instead, they will offer tools for others to do so.

Interestingly, IBM showcased the aforementioned solution at its conference dubbed, “Think 2019.” The conference took place last month in San Francisco, where the tech giant’s CTO and director of cloud security, Nataraj Nagaratnam called storage of cryptocurrencies a major use case for Big Blue’s cloud.

When contacted by a crypto media outlet, IBM referred most questions to Chun. But the director of IBM’s “Z As a Service” cloud solution, Rohit Badlaney talked about IBM’s involvement in the forthcoming Digital Asset Custody Service (DACS).

It is to be noted that the move suggests IBM’s getting deeper into the blockchain and digital asset space, after developing the Hyperledger Fabric private blockchain for enterprises. This is also suggested by its more recent involvement with digital assets and cryptocurrencies through its work with the Stellar Foundation.

While cryptocurrency and digital asset custody was once the preserve of cryptocurrency exchanges and crypto wallet providers, the promise of institutional investment entering the digital assets and crypto space has provoked a contest to come up with industrial-grade and safe solutions, which are also well-known in terms of usage to these large players.

Interestingly, the crypto custody service that IBM and Shuttle are offering, varies to a great extent from the cold storage solutions used by most digital asset custodians, where the private keys are essentially held in a device not connected to a network.

It is to be noted that these air-gapped arrangements have conventionally been thought of as allegedly the most excellent way to lessen attack vectors. Chun said in his presentation that from a technology standpoint, it sounds a little oxymoronic.

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