Ripple’s Four Best Practices for Institutional Asset Custody
Ripple’s policy team has identified four best practices for digital asset custody following a workshop with Blockchain Association Singapore. They urge a compliance-by-design approach, aligning asset segregation and recovery protocols with regulators. Institutions should adopt tailored custody models—third-party, hybrid or self-custody—and explore advanced wallet types beyond hot and cold storage. Emphasizing digital asset custody resilience, Ripple recommends meeting recovery standards such as the EU’s DORA, and implementing robust monitoring and incident-response processes. Governance measures like segregation of duties, independent oversight and audit trails are also essential. Ripple highlights that strong custody infrastructure will support mainstream stablecoin use in trade finance, cross-border payments and liquidity management. Its own Ripple USD (RLUSD) stablecoin, issued under a New York Trust Charter with segregated reserves and regular audits, exemplifies compliance best practices. These foundational steps aim to underpin scaling tokenized finance and cross-border settlement in a secure, interoperable digital financial system.
Bullish
Ripple’s release of four best practices for digital asset custody signals growing regulatory alignment and operational maturity. Institutional confidence in custody infrastructure is critical for stablecoin adoption and tokenized asset growth. By emphasizing compliance-by-design, resilience and governance, these guidelines reduce counterparty and operational risks. Historically, similar regulatory clarifications—such as the U.S. OCC’s wallet rulings—have led to surges in institutional crypto flows. In the short term, improved custody standards may boost demand for institutional custody services and stablecoins like RLUSD. Over the long term, the focus on robust custody will underpin broader tokenized finance, cross-border settlements, and smart contract integration, driving sustainable market expansion.