American multinational investment bank Cowen Inc. will join some Wall Street organizations after announcing plans to hold digital assets for hedge funds and asset managers. The firm partnered up with Standard Custody & Trust Co. to provide ”institutional-grade” custody services for cryptocurrencies.
The Demand Is Here
The recent rally of most crypto assets has caught the attention of many investors and capital holders. Following the increased demand, the US investment bank Cowen Inc. revealed it will enable crypto custody services to hedge funds and asset managers.
To do so, the institution collaborated with the settlement platform for digital assets Standard Custody & Trust Co. Moreover, Cowen will also make a $25M investment in PolySign Inc. – a parent company of Standard.
Jeffrey Solomon – CEO of Cowen – explained the bank’s decision and informed that the innovation will be launched soon:
”The demand is clearly here. We’re going to be able to help a lot of our institutional clients get over the hump and start trading digital assets in the not-too-distant future.”
However, Solomon also outlined how important the custody service is reminding that the lack of clear regulations is still a hassle for asset managers:
”If you’re an institutional investor the bar is extremely high for you to put investments in any asset that does not have a clear chain of custody that you can access at a moment’s notice. Even if you had a view on the asset class, if you can’t demonstrate custody then you can’t trade it.”
Additionally, Cowen’s investment plan is part of a bigger $53 million fundraising round that includes participants such as Blockchain.com and Race Capital. The cooperation came a few days after the New York State Department of Financial Services authorized Standard as a limited-purpose trust charter. This placed the entity among nine firms that have earned the classification from the custodian.
Following the Example
The move of the multinational bank Cowen is not pioneering in the field. Previously, CryptoPotato reported that the oldest American bank – BNY Mellon – announced plans to offer cryptocurrency services to its institutional customers.
The report added that the New York institution will not handle its crypto offerings any different from other traditional asset classes, such as stocks. Additionally, the bank revealed that it is already in talks with its customers to bring their holdings to its platform.