The role that digital asset custodians play in the cryptocurrency ecosystem is rapidly increasing in scope as institutions loom on the edge of broader entry into the market. The expansion of custodial services has focused on bringing more conventional financial instruments to the digital assets arena, by creating yield enhancement accounts and more advanced storage features.
Vo1t – one of the leading digital asset custodians – has recently announced their Prime Account for institutional investors, detailing how the interest-bearing accounts for digital assets can yield up to 5 percent annualized returns for their clients. The minimum balance requirement is $1 million, there are no investment fees, and the cold storage account earns interest via over-collateralized lending of a minority portion of the account.
Vo1t Director, Sebastian Higgs, detailed
“The prime account is comparable to a brokerage account held at an agency lender such as State Street or BNY Mellon. We want to be transparent in the arrangement, highlighting the rewards but also the risk which is designed to be ultra-conservative. This arrangement is suitable for institutions looking to make a passive return on their cold storage digital assets as a value add within their broader portfolio strategy.”
Vo1t’s interest return depends on the market rates of the digital assets, which initially will include Bitcoin, Bitcoin Cash, Ether, Litecoin, and Ether Classic. AON insures all asset deposits with Vo1t.
The growing institutional interest in digital assets has coincided with a widespread emphasis on bringing conventional financial instruments to digital assets. Custodians like Vo1t are viewed as key players in fostering more support by institutions who may be hesitant to enter the digital asset ecosystem. Interest returns are becoming more prevalent in the cryptocurrency sector with liquidity pools and P2P lending services, and have even penetrated other markets – like with stablecoins.
Vo1t CEO, Miles Parry says,
“Over the last 12 months, we have been building on our foundational success. Some market participants want their assets completely offline, fully segregated, and off the radar of any third parties – we brought that to market in 2017. Other participants don’t want cold storage to mean a drag on the balance sheet, so today we are delighted to open the Vo1t Prime Account.”
Digital asset custodians have progressed considerably since their foundations, and now include multi-signature cold storage, fail-safes, enterprise service layers, and proprietary HSM & access features that are prevalent with conventional financial assets. Vo1t even offers military-grade encryption with physical storage at multiple facilities guarded by armed personnel and high-level monitoring systems.
Vo1t has also honed in on ‘trimming the fat’ from their cold storage without compromising its security, citing secure withdrawal of any asset in under 2 hours despite numerous layers of protection. The Vo1t team comes from backgrounds of expertise in physical and cyber security along with extensive experience in banking from the likes of the Ministry of Defence, the FCA, and Goldman Sachs.
Established in 2015 and trusted among numerous financial institutions, Vo1t is leading innovation in digital asset custody with advanced security and providing yield enhancement services.