Institutional Trust in Digital Assets Driven by Custody Innovation and Compliance Design

Ripple has underscored the critical role of digital asset custody in the future of institutional finance, emphasizing its importance in supporting the projected $18.9 trillion market for tokenized real-world assets by 2033. This forecast comes from a report jointly published by Ripple and Boston Consulting Group (BCG) as part of Ripple’s 2025 New Value Report. The report indicates that institutional confidence in digital assets has grown substantially, with 71% of financial institutions and enterprises in the Asia-Pacific region expressing increased confidence in the past six months. Notably, while only 30% of firms currently employ custody solutions, an additional 52% plan to adopt such services within the next three years, highlighting a growing institutional demand for secure and compliant infrastructure.

The increasing reliance on custody solutions is driven by the need to manage risk, ensure regulatory compliance, and facilitate new financial models. The recent co-hosted Custody & Cybersecurity workshop by Ripple and the Blockchain Association of Singapore (BAS) brought together industry leaders to address key challenges and best practices in custody, particularly around stablecoins and broader digital assets. The event marked the launch of a report titled Best Practices for Custody and Security for Institutional Stablecoin Users, developed by the BAS Stablecoin & CBDC, and Cybersecurity Sub-Committees. The report provides practical guidance for institutions in designing custody frameworks aligned with both enterprise needs and regulatory expectations.

One of the key themes of the workshop was the importance of a compliance-by-design approach. Participants highlighted the necessity of embedding regulatory compliance into the architecture of custody systems, particularly in jurisdictions like Singapore, where Digital Payment Token (DPT) service providers must adhere to requirements such as customer asset segregation and robust documentation. The workshop also emphasized the absence of a one-size-fits-all custody model, with institutions advised to choose solutions tailored to their operational needs, risk tolerance, and maturity. The spectrum of custody models—ranging from fully outsourced to hybrid setups—was discussed in detail, with each model offering distinct trade-offs in terms of control, scalability, and operational complexity.

Operational resilience emerged as another foundational element for institutional-grade custody. As digital assets become more integrated into financial operations, systems must be designed to withstand disruptions and ensure service continuity. This includes layered access controls, clear escalation protocols, and robust incident response frameworks. The discussion also touched on regulatory developments such as the European Union’s Digital Operational Resilience Act (DORA), which sets benchmarks for business continuity and third-party risk management. These standards are essential in maintaining trust and ensuring secure service delivery across multiple jurisdictions.

The role of custody in enabling stablecoin adoption was also highlighted, particularly in cross-border payments and trade finance. Enterprise-grade custody solutions are essential for enabling real-time collateral tracking, programmable settlement workflows, and transaction traceability. Ripple USD (RLUSD), a stablecoin issued under a New York Trust Company Charter, was presented as an example of a regulation-first approach, featuring bank-level oversight and full backing by high-quality liquid assets. Looking ahead, custody infrastructure is expected to evolve further, integrating with smart contracts and tokenized documents tied to off-chain conditions. These developments will be crucial in supporting programmable payments and enabling full on-chain execution of trade flows and compliance processes.

Source: [1] Digital Asset Custody: Building Institutional Resilience, https://ripple.com/insights/digital-asset-custody-building-institutional-resilience-compliance-and-scale/