A Bitcoin-only trust company may soon be established in the United States, according to plans disclosed by BitGo and Swan Bitcoin on September 15. The joint venture is awaiting regulatory approval, the companies said in a statement.
The soon-to-be-formed entity will handle similar activities of a trust company, including Bitcoin (BTC) custody, administration and management on behalf of its beneficiaries. Swan CEO Cory Klippsten said the solution is designed to provide Bitcoin custody services without the risk of being under the same roof as other altcoins.
“For years, we have heard from major customers, partners, and other Bitcoin companies that they prefer a Bitcoin-only software and services stack that is strictly focused on the best possible custody that leverages Bitcoin’s unique capabilities,” Klippsten explain.
Klippsten told Cointelegraph that the companies are in contact with state regulators about the plans but have not yet applied for regulatory approval. “We are first evaluating acquisition options,” he revealed.
As part of our long-term vision to drive Bitcoin adoption, we are announcing a major step forward for Swan and the entire Bitcoin ecosystem:
BitGo and Swan Announce Plans to Establish America’s First Pure Bitcoin Trust Company
— Swan Bitcoin Adoption Team (@SwanBitcoin) September 14, 2023
BitGo provides digital asset security and custody services and supports more than 700 cryptocurrencies, according to its website. In contrast, Swan’s business is entirely focused on Bitcoin, allowing users to invest in Bitcoin through one-time and recurring purchases, with records hosted at Fortress Trust and Bakkt, while BitGo acts as a cold storage custodian.
The new joint venture will target institutional investors such as asset managers, pension schemes and family offices, as well as governments and corporate treasury sectors. It will provide cold storage, fraud prevention, anti-money laundering and know-your-customer agreements among other Bitcoin-related services.
Institutional investors in the cryptocurrency space are a fast-growing market in the United States, especially as the world’s largest asset managers seek regulatory approval for spot Bitcoin exchange-traded funds (ETFs). Several major Wall Street banks offer cryptocurrency custody solutions to institutional investors, including Bank of New York Mellon and Deutsche Bank.
“We believe it is likely that several ETFs will be approved in 2024, leading to a new wave of Bitcoin market entrants seeking mature, reputable and technically proficient partners to meet a range of needs,” Swan CEO explained. The U.S. Securities and Exchange Commission delays decision on Bitcoin spot products. Analysts predict that regulators may delay the decision until early 2024 as the deadline approaches.
“Our team has worked closely together for nearly a year to build a stronger qualified custody model. In early 2023, we recognized the opportunity to build a pure-play Bitcoin custodian that combined the unique capabilities of each company and supported those in the process of advancing Bitcoin. Employ cutting-edge innovators,” said Mike Belshe, CEO of BitGo.
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