How to build a cryptocurrency trading, investing and custody infrastructure for your clients
- May 27
- 8 min read
Updated: Jul 7
Growing clarity over the regulatory treatment of cryptocurrencies and digital assets has created an opportunity for regulated financial institutions to provide their clients with access to crypto trading, investment and custody services. The question is: should they build an infrastructure in-house, buy a platform from a vendor or outsource the service to an established provider?
Webinar Replay
Where Finance Finds Its Future podcast by Future of Finance is available wherever you get your podcasts, with all episodes ready to listen anytime.
Poll Charts, Key Takeaways, and Write-Up
Traditional banks are offering cryptocurrency services to institutional clients partly for commercial reasons (cryptocurrency trading is a high margin business), partly for strategic reasons (cryptocurrencies fit within broader digital asset ambitions) but mainly for defensive purposes (to prevent clients defecting to third parties which might offer them conventional asset services as well).
80 per cent of the webinar audience active in cryptocurrency markets already (on their own account or on behalf of clients or both) were aiming their services at institutional clients. A third accessed the markets for clients via regulated or unregulated exchanges, a fifth via agency or prime brokers and a sixth via proxies such as funds, derivatives and stocks exposed to cryptocurrencies, including corporate treasuries.
Regulatory changes (such as MiCAR and the GENIUS Act) have lowered the barrier to institutional participation in cryptocurrency markets, but banks have faced technical challenges in giving clients access to the markets. They have had to decide if the technical obstacles were best cleared by building services in-house, buying a platform from a vendor or outsourcing the service to an established provider.
Banks recognise it is essential to own the client interface, to minimise the risk of losing clients to third parties. For some banks, that translated into retaining control by providing a cryptocurrency custody service first and leaving trading and staking services to later. For other banks, it meant getting a service in place quickly, using third party custodians and brokers, almost irrespective of the associated loss of control and counterparty risk.
Banks that launch their cryptocurrency services with a custody offering only, eschewing trading and staking services, are addressing a palpable client priority. For the audience, asset safety was the top post-trade priority, followed by settlement. In an asset class prone to hacks and lost private keys, institutions value assurance that assets will be kept and exchanged safely, and that they will be made whole if assets go missing.
Yet banks that lead their cryptocurrency offering with custody, eschewing the risks associated with trading and staking, also take a less visible risk. Offering a pure custody service does not relieve banks of the obligation to screen the source of assets coming into custody. It can also make it more difficult to screen effectively, since they must rely on indirect assurances from end-clients and intermediaries.
On the other hand, banks that emphasise speed to market are usually looking to capture revenues immediately, protect their client base, limit up-front investment costs and avoid inadvertent compliance breaches. Interestingly, once a service is up and running, they rarely retain the combination of third-party services and technologies they chose initially. Indeed, they look to bring as many services in-house as soon as possible.
So, it is not surprising that, of audience members offering cryptocurrency services, half built their platform in-house. A further quarter use some combination of in-house and vendor technologies plus a third-party service provider. Only a fifth rely on digital asset platforms offered by a custodian, integrated with traditional services from the same provider, and just 5 per cent bought a cryptocurrency platform from a technology vendor.
As regulated financial institutions, banks are constrained in the range of suppliers they can work with. Any service partner must not imperil compliance with the capital, governance, operational resilience, financial crime and best execution obligations laid on banks. Once these standards are met, and integration and connectivity are settled, vendors and service providers struggle to differentiate their offerings.
Banks limit the cryptocurrencies they support. Though some extend their range in adventurous jurisdictions, clients that trade down the quality curve must find other routes to market, such as accessing exchanges directly. Banks look to grow horizontally rather than vertically, positioning cryptocurrencies within a grander strategy that anticipates large-scale tokenisation of money, securities, funds and physical assets.
Long-term extension into other tokenised asset classes is not unimportant for the clients of the banks – they want future-proofed services – but the audience emphasised four more urgent priorities. These were liquidity (the ability to buy and sell readily), price quality (trading without moving prices), access to as many sources of liquidity as possible, and cheap and easy switching between on-chain and off-chain cash.
In theory, every outsourced provider aims to deliver on all four priorities. In practice, regulated providers servicing regulated clients can interact with regulated counterparties only. This precludes important sources of liquidity such as automated market-makers. In cryptocurrency markets that are fragmented, automated and open 24/7, customer loyalty is also absent. The briefest service interruption moves orders elsewhere.
But it is a mistake to over-emphasise the importance of trading issues in cryptocurrency services purchasing decisions. The audience attached importance to asset safety and especially compliance, in a field where laws and regulations are still developing, and financial crime and data privacy rules are enforced robustly. Post-trade services and compliance are at least as important to buyers as efficient trading.
Institutional money active in cryptocurrency markets is demonstrably demanding. The audience were clear that they seek comprehensive services, available on a modular basis, that are priced competitively and offer efficient trade execution through access to multiple sources of liquidity despite the fragmentation of the marketplace, without compromising on the safety of assets in custody or compliance with laws and regulations.
It would be surprising if client demands do not lead to consolidation of service provision in the cryptocurrency markets. This is happening already. The consolidation is proceeding chiefly at the national rather than the regional level, in line with the commoditisation of services, which increases the value of branding and networks at the country level; the growing burden of regulatory compliance; and the need for scale.
What was the event about?
Institutional adoption of cryptocurrencies is increasing. Why? In Europe, MiCAR has delivered regulatory certainty. In the United States, the new administration has embraced both cryptocurrencies and Stablecoins - the crucial bridge between the cryptocurrency and money markets - and the courts have authorised spot Bitcoin ETFs, turning cryptocurrencies into a legitimate institutional asset class. In Germany, where early and effective legislative progress in the domestic market is now reinforced by a standardised regulatory framework spanning the whole of the European Union - the Markets in Crypto Assets Regulation (MiCAR) - both law and regulation facilitate the purchase and sale, trading and safekeeping of cryptocurrencies for both dealing and investment purposes. As a result of these developments, regulated institutions on both sides of the Atlantic are scrambling to build cryptocurrency trading, investing and custody services for their clients. This webinar explores how regulated institutions can offer their clients safe access to cryptocurrency markets in the form of brokerage, trading, settlement and custody services, unlock new business opportunities for their firms and manage the risks of cryptocurrency activities, while remaining fully compliant with their regulatory obligations.
When did it happen?
Wednesday, 27 May 2026 at 14.00 London Time
Who was on the panel?
Stephanie Hurry, Global Head of Business Development & Partnerships at Boerse Stuttgart Digital
Francisco Maroto, Head of Blockchain & Digital Assets at BBVA
Andreas Sack, Head of Digital Assets Infrastructure at DekaBank
Carlos Martin Doncel, Digital Assets and New Initiatives Lead at Swissquote
Moderated by Dominic Hobson, Co-founder and Editorial Director at Future of Finance
Why people attended?
Legal and regulatory changes mean the cryptocurrency markets are now open to regulated institutions. The cryptocurrency markets offer both institutional and retail investors portfolio diversification and hedging opportunities which they are eager to seize. If they are not to lose clients to competitors, buy and sell-side firms of all shapes and sizes need to develop an infrastructure to support the cryptocurrency activities of their existing client base. They can build it in-house, buy a platform from a vendor or entrust the task to an established provider. This webinar will explain how firms can make an informed and commercially sensible choice, while remaining complaint.
Who attended?
Cryptocurrencies are now an established market, of potentially enormous disruptive force, that affects every organisation from the C-suite to the back office. Business leaders, risk and compliance functions, technology leads, heads of innovation, product managers and heads of operations can all benefit from the discussion. Management teams at retail banks, private banks, retail brokerage firms, asset managers, wealth managers, hedge funds, proprietary trading firms and family offices, whatever their level of knowledge or expertise, will get enjoyment as well as value from the discussion.
What was discussed?
The market drivers
What is driving the rising institutional interest in cryptocurrency infrastructure?
Do banks see cryptocurrencies as an integral part of their digital assets strategies?
Making a choice
What is the minimum that regulated institutions need in terms of cryptocurrency infrastructure, i.e., what are the essential products needed by their clients and that they must provide?
Institutions have three choices: (a) building the infrastructure in-house, (b) buying it from a vendor or (c) outsourcing to an established cryptocurrency infrastructure. How should they choose between them?
Are regulated institutions free to make any choice they like, or do regulations limit the choices they can make (e.g., must regulated institutions deal with regulated counterparts only)?
How do cryptocurrency infrastructure needs differ between firms whose underlying clients are retail (B2B2C), institutional (B2B) and in-house (proprietary)?
How difficult is it to integrate a third-party brokerage and custody service into customer systems, staff and processes?
What governs the choice between buying cryptocurrency custody services from the same infrastructure provider that supplies the brokerage service and buying them separately from independent entities?
What are the pros and cons of white-labelling a third-party cryptocurrency infrastructure?
How can institutional firms ensure that the interests of their cryptocurrency infrastructure provider are aligned with their interests?
How important is the price of an outsourced service relative to providing the service in-house?
Making it work
Institutions seek infrastructure that delivers competitive pricing and efficient execution, which implies accessing multiple sources of liquidity, but the cryptocurrency markets are fragmented, and this has to be provided without compromising on the security of custody. How can institutions best manage the complexity?
What is the balance of advantage for institutions between dealing with a single broking counterparty and many broking counterparties (e.g., credit risk, concentration risk, margin call costs, reporting etc.)?
Is meeting best execution obligations feasible if a broker limits the number of exchanges and liquidity providers that are accessed?
What should institutions expect brokers to do to guarantee liquidity – the ability to buy and sell – in all market conditions?
Institutions will be concerned that their underlying clients will be made whole if their assets go missing. What sort of custody arrangements are best designed to deliver that assurance (e.g., direct, sub-custody, third-party independent, self-custody)?
How are customer assets in custody protected from a technical perspective (e.g., hot and cold wallets, MPC, governance, audits, insurance, regulatory oversight etc.)?
Should an infrastructure service incorporate additional cryptocurrency services, such as staking and lending?
Closing question
The cryptocurrency markets are still evolving, and so is the market infrastructure, but it is likely eventually to consolidate. How do you expect trading, inviting and custody to be supported in fully mature cryptocurrency markets?
Contact Information
If you would like to be involved, get in touch with: Wendy Gallagher
Co-Founder Future of Finance
Mobile 07725 160903
