Crypto Custody Enters the Second Half: From 'Keeping Assets Safe' to 'Managing Assets Well'

Custody is just the entry ticket: Crypto trust banks are vying for the next step.

Written by: Tiger Research

Compiled by: AididiaoJP, Foresight News

Crypto Custody Enters the Second Half: From 'Keeping Assets Safe' to 'Managing Assets Well'

In the past year, the digital asset custody market has expanded rapidly. The number of licensed custodians under the European MiCA framework has increased from 50 to 230, more than quadrupling. Standard Chartered acquired a specialized custody firm, and Citibank also announced plans to enter the market within the year.

However, custody itself has a natural ceiling: fees are calculated as a percentage of the value of the assets held, and if the asset scale does not increase, revenue is hard to jump significantly. Thus, the industry is beginning to move to the next step—trust services. Custody is only responsible for 'keeping assets safe', while trusts can manage, invest, and dispose of assets.

Tiger Research judged a year ago that custody is the core foundation of the digital asset industry. The current question has become: what else can these companies holding assets do for their clients?

Key Points

• The number of licensed custodians under the European MiCA framework has increased from 50 to 230 in one year, with custody demand rising alongside RWA and stablecoin expansion.
• Custody revenue is linked to the scale of assets under custody, with growth having an upper limit; trust services can penetrate management and investment, opening up higher value spaces.
• Historical paths are similar: U.S. safe deposit companies expanded from safe deposit box services to estate management and bond collateral management, while State Street moved from fund custody to asset management and ETF distribution.
• Anchorage and BitGo are integrating banking services such as stablecoin issuance, settlement, trading, and collateralized lending into custody; Agora and Catena are applying for national trust bank licenses, preparing to act as investment advisors and asset managers.
• Custody is becoming a baseline capability; future competition will not look at who has the most custody but at who can provide more services on top of custody.

Why Custody Business Must Move Towards Trust

The rising demand for custody is driven by the increasing number of on-chain assets.

Data from RWA.xyz shows that tokenized real-world assets have grown by 85% this year, with a scale of approximately $39.8 billion. Stablecoins are expected to grow by over 50% by 2025, with a total scale exceeding $300 billion, and then roughly maintain this level. Both tokenized assets and stablecoins require underlying assets to be held securely, naturally leading to an increase in custody demand.

However, custody is not a business that can grow indefinitely. Custody fees are mainly charged as a percentage of asset value, and revenue follows scale rather than service depth. Companies are therefore more willing to treat custody relationships as an entry point, extending into trust services to improve profitability.

In the short term, custody can capture the rising demand; in the long term, it serves as a springboard to higher value businesses.

Custody and Trust Are Not the Same

These two concepts are often used interchangeably, but their responsibilities differ.

Custody involves holding assets on behalf of clients. The client remains the owner of the assets, and the custodian's primary responsibility is safe storage.

Trust, on the other hand, is different. The client, as the principal, transfers assets to the trust company, which acts as the trustee, managing, investing, and disposing of assets according to the trust's purpose, with the benefits going to the beneficiaries designated by the client. The trust company must make its own decisions and therefore has a legal obligation to prioritize the interests of the beneficiaries.

To put it simply, custody is like watching over a safe deposit box; trust is more like managing a family fortune, responsible for investments and distributing to family members at agreed times.

Both hold client assets, but custody focuses on safekeeping, while trust focuses on management and investment.

Historical Script: From Safe Deposit Boxes to Trust Banks

The path that crypto custody is taking today has already been traversed by traditional finance.

Early digital asset custody primarily served spot and futures trading, requiring no complex management structure. As RWA financial products increased, clients began to need trust functions that could execute investment instructions and manage complex investment structures.

This is very similar to the history of the United States in the 19th century. During the 1860s, amid the Civil War, the issuance of government bonds expanded, leading to a surge in the demand for secure custody of debt securities. Later, with the emergence of collective investment tools like funds, custody work gradually professionalized, evolving into the trust industry.

Safe Deposit Companies: From Renting Boxes to Managing Estates and Collateral

The safe deposit companies in Boston and Rochester are typical examples.

They initially relied on renting out safe deposit boxes for income. Later, they obtained trust permissions, expanding their business to personal estate management and corporate bond collateral management.

The motivation for expansion came from problems that clients could not solve with just a safe deposit box.

For individual clients, the issue is inheritance. After a client passes away, the securities in the box need to be counted and distributed to heirs, but a company that only rents boxes has no authority to do this. After obtaining trust permissions, safe deposit companies could take responsibility for managing and distributing assets after the client's death. A typical arrangement is to invest the estate, providing lifelong income to the surviving spouse, and after the spouse's death, the principal is passed on to the children.

For corporate clients, the issue is bond collateral management. Companies issuing bonds to numerous investors need someone to manage the collateral on behalf of the bondholders and protect their rights in case of default. Individual bondholders find it difficult to handle these matters, so trust companies take over.

In 1883, the Boston company served as the trustee for the collateral of a $3 million bond issuance by American Rapid Telegraph. When interest was unpaid, it applied to dispose of the collateral on behalf of the bondholders.

These cases illustrate that safe deposit companies are not simply 'adding a business'. They first gain client trust, then obtain legal authorization, and then take on work that clients cannot handle themselves. Clients are willing to entrust their assets to them for safekeeping and also willing to let them manage further.

For today's custodians, the reasoning is similar: it is not enough to just look at how much custody asset scale has increased; it is also important to see what the clients holding these assets still need.

State Street: From Custody of Funds to Management of Funds

State Street's path has been from 'holding fund assets for others' to 'managing assets themselves'.

In 1924, State Street became the custodian bank for the first mutual fund in the United States. In 1978, it established an asset management department for institutional investors. Previously, it had been safeguarding assets managed by others, but thereafter it began to earn its own investment management fees.

Custody and asset management are placed under the same group, allowing clients to complete asset safekeeping and management within the same system, and State Street can also sell investment products to existing custody clients. Growth does not necessarily rely on finding new clients; it can also come from providing more services to existing clients.

State Street's asset management business did not start from scratch. It first engaged in index management and cash management, especially index management—buying assets according to indices, processing transactions, and maintaining position records, which are tasks that custodial banks perform daily.

In 1993, State Street collaborated with the American Stock Exchange to launch SPY, the first ETF in the United States, turning its institutional index management capabilities into a product that individuals could buy and sell on the exchange. The business moved from custody to asset management, and then from asset management to product distribution.

For crypto custodians, the next business may also be hidden in the assets they already hold and the clients they already serve. First, look at what clients need beyond safekeeping, and then provide the services they are most capable of offering. Helping clients utilize their assets is just as important as expanding custody scale.

Crypto Custodians Have Already Started Competing for Licenses

Several leading companies have already taken action.

Anchorage and BitGo are extending into stablecoin issuance and settlement; Agora and Catena are preparing for investment advisory and asset management. The directions differ, but the goal is the same: to find new revenue from the assets they already hold.

Anchorage and BitGo: Integrating Banking Services into Custody

Anchorage Digital and BitGo are following the path of safe deposit companies: starting from institutional digital asset custody and then providing financial services that make assets 'move'.

Both have trust service authorizations. Anchorage transitioned from a state-chartered trust company to a national trust bank regulated by the Office of the Comptroller of the Currency (OCC) in January 2021, while BitGo made the transition in December 2025.

Since then, their business has expanded from institutional Bitcoin and Ethereum products to RWA and stablecoins. Through trust banks and affiliated companies, they have layered trading, settlement, collateralized lending, and staking on top of custody. In the stablecoin sector, they also act directly as issuers, responsible for issuance, redemption, and reserve management.

Their competitors are no longer just other custodians. Traditional banks are entering the digital asset space, and Anchorage and BitGo already have an institutional client base and experience in handling digital asset transactions. As the institutional Bitcoin, Ethereum, RWA, and stablecoin markets expand, their opportunities to provide traditional banking services are also increasing.

This is akin to safe deposit companies growing into banks through trust services. Anchorage and BitGo may also evolve from custody experts into companies that handle financial business for institutions dealing with digital assets. If clients can deposit digital assets with them and conveniently complete the required financial services, they may be used as a local bank.

Agora and Catena: From Holding Assets to Managing Assets

Agora and Catena are more like State Street's path: first holding assets, then moving towards investment advisory and asset management.

On September 18, 2026, both companies received preliminary conditional approval from the OCC to establish national trust banks. However, they still need to meet capital and operational conditions for opening and obtain final approval before they can officially operate. Therefore, their advisory and asset management businesses under the trust bank are still in the preparation stage, and it is temporarily impossible to assess revenue and performance.

According to the plan, Agora will recommend investment opportunities and sources of returns to institutional clients holding assets with them, with the final investment decisions still made by the clients. Catena intends to directly manage assets according to the terms agreed with clients and will also manage assets used by AI agents representing companies. The paths differ, but both aim to add investment advisory or asset management on top of custody.

Early actions are important because in digital asset management, understanding the market and preparing strategies in advance is itself a competitive advantage.

In DeFi, earning returns relies on lending assets, providing liquidity, and combining multiple services, which is very different from traditional finance. Where returns come from and where the risks lie require time to explore. Even with rich asset management experience in traditional finance, it is difficult to enter the market directly without prior preparation.

If Agora and Catena can analyze investment opportunities and prepare management strategies a step ahead, they may run ahead of financial institutions that enter later. Once they start operating and accumulate records in performance and risk management, the gap may widen. If they can also make products accessible to retail investors, they may well become competitors to traditional asset management companies.

Custody Becomes the Baseline, the Next Battle is Additional Services

Safe custody remains the core function of custodians, but competition is shifting beyond safekeeping.

As the DeFi and RWA markets develop, clients increasingly want to invest, collateralize, and trade their assets. Tokenized government bond funds are an example: investors can not only hold the fund for returns but also use it as collateral to borrow stablecoins, and then use the stablecoins for other investments. One asset can serve multiple financial transactions. For financial institutions, helping clients utilize existing products in more diverse ways is just as important as creating new products.

This is also the expansion space for custodians. Institutions want to use digital assets for investment and trading, and besides safe custody, they need asset transfer, settlement, and collateral management. Custodians that already hold assets and can handle these tasks can take on a larger role in clients' financial transactions.

Trust services are one way to manage and invest assets. Trust companies can manage, invest, and allocate assets according to client goals and trust terms. By expanding services through trust banks and affiliated companies, custodians may evolve into companies that provide some traditional banking, brokerage, and asset management services.

However, obtaining a license alone will not bring growth. Custodians still need to build the services clients need, securely manage assets, and earn trust through actual results. Those who accumulate experience in digital asset management and trading first may occupy positions earlier than traditional financial institutions.

A year ago, the market was focused on how large the custody industry itself could grow. Now the question has become: what can these companies holding assets do next? The coming year may be a year of formally launching trust services that have been long prepared and competing for clients. Custody is the baseline; what services can be built on top of the trust license will determine who leads in the next phase.