From Exchanges to Fintechs: The Shift in Crypto Custody
The world of digital assets is moving beyond exchanges and into mainstream financial systems. Once limited to crypto-native platforms, crypto custody is now a growing vertical for fintechs, neobanks, and even payment gateways. As investors seek secure and compliant storage for digital tokens, fintechs are positioning themselves as the bridge between innovation and regulation.
Globally, financial giants like PayPal, Revolut, and Fidelity Digital Assets have integrated custody services directly into their fintech infrastructure. In India, platforms such as CoinDCX, Mudrex, and traditional fintechs like RazorpayX are exploring custody partnerships to handle tokenized assets securely.
This convergence is natural. Fintechs already manage sensitive financial data, handle KYC/AML processes, and maintain high-grade cybersecurity frameworks. Extending that capability to digital assets allows them to provide custody solutions with stronger compliance, insurance, and accessibility.
Insight: Crypto custody isn’t just about wallets—it’s about trust, governance, and the infrastructure that keeps digital value safe.How Fintechs Are Reinventing Digital Asset Safekeeping
At the core of crypto custody lies the secure storage of private keys — the cryptographic credentials that represent ownership. Traditional custody solutions relied on cold storage (offline vaults) to prevent hacking. Fintechs are now combining these methods with APIs, biometrics, and advanced encryption to deliver hybrid custody models.
Using Fintech Custody Architecture, fintechs offer tiered protection: hardware-secured keys for institutions, cloud-based encryption for retail, and compliance-grade monitoring for both. Custody APIs enable seamless integration with wealth apps, trading dashboards, and digital payment rails.
Payment firms are also embedding custody into their infrastructure. For instance, PayU and Stripe have experimented with digital asset custody pilots, allowing businesses to accept tokenized payments while automatically storing and converting them securely. These models mirror the “bank-grade custody” principles historically used for securities.
For wealth management fintechs, custody provides diversification. Platforms like Groww and Zerodha have explored token-based instruments where user ownership could be verified on blockchain while assets remain custodied under a regulated entity. With the rise of tokenized securities and stablecoins, Secure Asset Tokenization will soon blur the line between digital and traditional custody.
Tip: The next wave of fintech growth lies in custody — combining asset security, regulatory clarity, and user-friendly access in one digital layer.India’s Regulatory Outlook and Global Parallels
India’s approach to crypto custody is evolving. While trading regulations are still under deliberation, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have signaled openness to regulated digital asset infrastructure. Custody sits at the center of this shift, since it enables oversight, consumer protection, and anti-fraud mechanisms.
The RBI’s digital asset discussions focus on secure holding environments and traceable audit trails. Fintechs aligning with Rbi Digital Asset Guidelines are preparing systems that could eventually be integrated into India’s digital financial infrastructure — similar to the Account Aggregator or UPI architecture.
Globally, the European Union’s Markets in Crypto-Assets (MiCA) regulation requires that crypto custodians meet capital, cybersecurity, and segregation standards akin to banks. Singapore’s MAS mandates licensing for crypto custody under its Payment Services Act. These international frameworks are influencing India’s own policy direction, emphasizing compliance-driven custody models.
Fintechs working under Sebi Crypto Compliance Framework are developing partnerships with licensed trustees and depositories to prepare for tokenized asset management — paving the way for hybrid portfolios that combine regulated securities and blockchain assets.
Future Pathways for Secure Custody Innovation
As fintechs mature, custody will become the backbone of their digital asset strategy. Institutional investors, family offices, and even retail customers demand safe and compliant access to tokenized markets. This presents an opportunity for fintechs to evolve from facilitators to full-fledged digital custodians.
Emerging solutions like multi-party computation (MPC), biometric verification, and decentralized recovery protocols are redefining how keys are managed. These technologies allow users to regain access securely even if one key component is compromised. Combined with AI-driven risk scoring, they create an intelligent custody framework that continuously adapts to threat patterns.
In India, the growth of regulated custody could accelerate fintech adoption of blockchain-backed instruments such as tokenized debt, CBDCs, and programmable deposits. Partnerships between banks and fintechs will play a crucial role in scaling these models responsibly.
Ultimately, crypto custody is more than a security feature — it’s a financial foundation. The fintechs that master compliance, integration, and customer trust will shape how digital assets move in tomorrow’s economy.
The future of fintech isn’t just digital — it’s inclusive, intelligent, and human.
Frequently Asked Questions
1. What is crypto custody?
Crypto custody refers to the secure storage and management of digital assets like cryptocurrencies or tokenized securities by regulated entities.
2. How are fintechs involved in crypto custody?
Fintechs integrate custody into their payment, investment, or banking systems to provide safe and compliant asset storage for users.
3. Why is regulated custody important?
It protects investors through compliance, insurance, and segregation of assets, reducing fraud and operational risk.
4. What is India’s stance on crypto custody?
India is developing frameworks under RBI and SEBI for regulated digital asset storage, focusing on transparency and consumer safety.
5. What technologies secure crypto custody?
Custody uses encryption, multi-signature wallets, and biometric verification to protect assets from unauthorized access.