Switzerland gets a new industry standard for crypto custody
- Swiss-based CMTA just published a new common industry standard for crypto custody.
- The move represents the first big step towards regulating crypto custodians in the country.
- This is important, as there is a big difference between crypto and traditional asset custodians.
Switzerland is making a move to introduce a common industry standard for management and custody of cryptos. The new standard comes from its CMTA (Capital Markets and Technology Association).
The common standard for crypto custody arrives
The CMTA announced the new standard earlier today, April 30th, calling it a ‘Digital Assets Custody Standard.’ According to its announcement, the goal is to bring more clarity to the differences between storing cryptos and traditional assets.
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In addition to that, the CMTA believes that it is important to set some baseline operational and security requirements. Otherwise, the industry actors would remain at risk.
CMTA’s work will likely improve the situation regarding crypto and blockchain technologies. After all, that is the purpose for which the organization was originally created for. It acts as a non-profit, independent association that exists for only 2 years at this point, after its establishment in Geneva in 2018.
Its goal is the promotion of DLTs and digital assets, for the purpose of driving adoption. However, in order to make the greatest impact, it needs to first dedicate its efforts to tackle the legal side of the matter. This is why the document is so important, as it represents the first step towards reaching a consensus on common standards in crypto. At least, as far as crypto custody and management go.
CMTA continues to shape crypto and blockchain industries
CMTA made similar moves before, when it published its AML standards. Of course, neither those, nor this week’s custody standards have the status of formal regulations. But, they will serve as a mark of consensus among experts in the financial sector.
Having such a standard is important, as trading of cryptocurrency is becoming bigger than ever. Institutional and wealthy investors are joining the industry, and they are in need of reliable custodians. They need to know that those in charge of their funds remain resistant to theft, hacking, loss, and alike.
Every business that provides crypto custody services will have to aim towards achieving the requirements set by the CMTA. Failing to do so will not necessarily result in punishments, but it might result in the services being left behind. And, of course, there is a fair chance that such requirements will evolve into official laws and regulations.