NEW YORK (Reuters) – Dutch bank ING is working on developing technology to help clients safely store digital assets, according to people familiar with the matter.
A pedestrian walks past the logo of ING bank by the entrance of the group’s main office in Brussels November 6, 2013. ING said it should complete its restructuring two years ahead of schedule, meaning the Dutch banking and insurance group could be one of the first euro zone casualties of the 2008 global crisis to emerge from a state rescue. REUTERS/Francois Lenoir (BELGIUM – Tags: BUSINESS LOGO)
The custody project, which is being run out of Amsterdam, is still in its early days and is one of the bank’s several initiatives around blockchain, the technology underlying cryptocurrencies, the sources said.
ING “sees increasing opportunities with regard to digital assets on both asset backed and native security tokens,” the bank said in a written statement to Reuters. ING is particularly focused on developing the technology behind digital assets to give its clients a compliant way to access the emerging sector, it added.
The project comes as established financial companies look into offering custody and other services for both cryptocurrencies such as bitcoin, as well as other types of digital assets.
Many large financial firms are hoping that traditional assets such as bonds or stocks can be turned into digital assets and be issued and transferred using blockchain technology. They believe this could help streamline and reduce costs in some complex capital market processes.
Others have started offering custody of cryptocurrencies like bitcoin and ether, or announced their intention to do so.
The scarcity of custody and other back-office services by brand-name financial companies has been one of the road blocks to more institutional investments in the new asset class.
In October 2018, Boston-based investment manager Fidelity launched a division focused on providing cryptocurrency custody and trading services to institutional investors. This November it received approval by New York regulators to offer its services to companies based in the state.
Japanese bank Nomura Holdings Inc also announced in 2018 that it had set up a new venture called Komainu to offer custody of cryptocurrencies for institutional investors.
While banks and other financial firms continue to invest in developing blockchain, the technology has yet to deliver on its promise.
A review by Reuters of more than 33 projects involving large companies announced over the past four years and interviews with more than a dozen executives involved with them showed many have not gone beyond the testing phase.
Reporting by Anna Irrera; editing by Nick Macfie