IBM has entered the crypto custody space according to Coindesk. It is anticipated that in late March Shuttle Holdings, a New York investment firm, will launch the beta version of a custody solution for digital assets built on IBM’s private cloud and encryption technologies.
Neither IBM nor Shuttle will be holding crypto, but they will offer the tools for other to do that. Brad Chun, Shuttle’s chief investment officer, told CoinDesk that potential users include banks, brokers, custodians, funds, family offices and high net worth investors who want to do self-custody, as well as exchanges.
“We have a list of selected clients that we are launching limited service with this month,” Chun said. The service is “not open to the public yet and there is a wait list to get into our beta.”
IBM had already unveiled its solution at the “Think 2019” conference in San Francisco. Nataraj Nagaratnam, IBM’s CTO and director of cloud security, told the audience that storage of crypto is a prime use case for Big Blue’s cloud.
Nagaratnam said, before welcoming Chun onstage, “What better example than taking a financial technology that is changing the world. Look at digital assets; how do you secure the data? … [This is] top of mind for a lot of people in the financial industry.”
This latest move suggests IBM is wading deeper into the digital asset space, after developing the Hyperledger Fabric private blockchain for enterprises and more recently getting involved with cryptocurrency through its work with the Stellar Foundation.
The custody service that Shuttle and IBM are offering differs greatly from the cold storage solutions used by most crypto custodians, where the private keys are held in a device not connected to a network. Chun told Coindesk: “There are always trade-offs between security and efficiency, but we do not utilize a traditional cold storage system. Instead, we keep keys at rest encrypted in multiple layers as data blobs so that an organization can store these backups using their pre-existing disaster recovery and backup processes and media.”