American investment bank Cowen Inc. is planning to offer crypto custody services for hedge funds and asset managers.
In a statement published on Thursday, the 103-year-old firm says that it has partnered with financial technology company PolySign to provide crypto services for institutional clients.
The partnership will allow the bank to use the solutions provided by institutional-grade custody and settlement platform for digital assets Standard Custody & Trust Co., a subsidiary of PolySign.
Cowen says it is also investing $25 million in PolySign, which will form part of the $53 million fund-raising round to support the development of institutional blockchain applications.
The bank is venturing into digital asset custody services as the total market value of cryptocurrencies exceeds $2 trillion. Cowen CEO Jeffrey Solomon says that as digital assets grow and mature as an asset class, investors are looking for trusted custody and trading solutions comparable to those in traditional securities.
Solomon tells Bloomberg,
“If you’re an institutional investor with a fiduciary requirement, 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.”
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