Institutional crypto custody in Asia: VISEO's collaboration with a British bank to craft next-gen platforms

Below, we distill key insights, statistics, and trends from reputable firms and research reports to illuminate the state of institutional crypto custody in Asia.

Surging institutional adoption in Asia

Asian institutions have been at the forefront of digital asset adoption. Survey data consistently show higher crypto adoption rates in Asia compared to the US or Europe. For instance, Fidelity’s annual institutional survey found that Asia had the highest adoption rate – 71% of surveyed Asian institutional investors were already invested in digital assets, far outpacing the U.S. (33%) and Europe (56%) in the same study. This early lead has only widened in recent years as more Asian investors allocate to crypto:

• Rising Allocations: A 2024 EY–Coinbase study confirmed that a large majority of institutions globally plan to increase crypto holdings, with 83% of investors surveyed intending to boost their crypto allocations in 2025. Asia’s share is significant in this surge – industry observers note that Eastern Asia accounts for the world’s largest share of large institutional crypto transfers by value, reflecting heavyweight participation by Asian funds and firms.
• Portfolio Significance: Digital assets have quickly become a material asset class in Asia-Pacific portfolios. One study found digital assets now make up about 7% of surveyed investors’ portfolios in APAC, ranking as the 5th-largest asset class – ahead of traditional allocations like foreign currencies, commodities, or collectibles. This underlines that what began as a niche is entering the mainstream of asset management in Asia.
• Institutional Drivers: Several factors fuel Asia’s institutional crypto uptake. Demographics play a role – wealth managers in hubs like Hong Kong and Singapore report growing demand from younger, tech-savvy clients (millennials) to include digital assets in portfolios. Additionally, large Asian financial institutions and family offices see crypto as a diversification play and a hedge. In a global Coinbase survey, nearly 70% of institutional investors said crypto offers the best opportunity for attractive risk-adjusted returns over the next 3 years, a sentiment that is propelling involvement in the asset class.
• “Flight to Quality” Post-Crises: High-profile crypto failures (such as exchange collapses in 2022) have paradoxically spurred more institutions into secure crypto channels. A PwC Hong Kong report notes that after several market shocks, “a flight to quality has occurred” – institutions are seeking trusted, institutional-grade custody solutions rather than informal or self-custody approaches. In other words, the need to safeguard assets properly has become top-of-mind as adoption grows. (Notably, 33% of institutional investors in one survey cited “secure custody” as a primary concern holding back further crypto investment)

In summary, institutional crypto adoption in Asia is robust and accelerating. The combination of high investor interest (with Asia often leading global surveys in adoption rates) and lessons learned from past mishaps is driving demand for reliable custody infrastructure. Next, we examine how Asian regulatory environments are responding to this trend.

Evolving regulatory frameworks across Asia

Regulatory clarity and support are key enablers of institutional crypto custody, and many Asian jurisdictions are moving to establish balanced frameworks. Consulting studies emphasize that Asia’s crypto markets benefit when regulators provide clear rules for custodians, exchanges, and digital assets, thereby boosting investor confidence. A prime example is Singapore, often cited as a model for its comprehensive approach:

• Singapore’s Clarity and Protection: Singapore has cultivated a “flourishing digital asset ecosystem” with a robust regulatory regime. The Monetary Authority of Singapore (MAS) has introduced explicit rules to govern crypto custody under its Payment Services Act. In 2024, MAS finalized new segregation and custody requirements for Digital Payment Token service providers, mandating that customer assets be held in trust accounts and kept separate from company funds. These measures (effective mid-2024) ensure that even if a crypto platform fails, clients’ coins remain safeguarded – a level of investor protection akin to that in traditional finance. Singapore’s clear licensing of crypto custodians and exchanges, along with guidance on stablecoins and tokenized assets, provides institutions the regulatory certainty to participate confidently in digital assets.
• Hong Kong’s Supportive Stance: Hong Kong is re-emerging as a crypto-friendly jurisdiction for institutions. According to PwC, the market in Hong Kong has been “buoyed by the government’s supportive stance in fostering a vibrant ecosystem for digital assets”. In 2023 Hong Kong introduced a new licensing regime for virtual asset trading platforms (allowing retail crypto trading under regulation), and is now turning attention to custodians. The Securities and Futures Commission (SFC) outlined a roadmap in 2025 that includes a dedicated licensing regime for crypto asset custodians, with standards mirroring traditional custody (e.g. requirements on capital adequacy, cybersecurity, and segregation of client assets). The SFC aims to have legislation in place by end-2025, which would formally bring independent digital asset custodians under regulatory oversight. This is expected to further institutionalize the market, as firms will be able to entrust assets to licensed custodians meeting high compliance bars.
• Other Markets: Across Asia-Pacific, approaches vary. Not all jurisdictions are equally permissive – for example, Indonesia allows crypto asset trading on a commodities exchange but does not yet permit banks or financial advisors to facilitate crypto sales to clients, reflecting a cautious stance. On the other hand, Japan was one of the earliest to regulate crypto exchanges (after the 2014 Mt. Gox incident in Tokyo) and requires exchanges to segregate client holdings and, in some cases, use trusted custodial arrangements – a framework that has helped Japanese institutions invest in crypto with more assurance. South Korea likewise has implemented strict rules (real-name verified accounts, bank custody of fiat, insurance requirements, etc.) for crypto service providers, which has increased transparency and safety in its large domestic crypto market.
• Global Alignment: Asian regulators are also coordinating with global standards. Hong Kong’s SFC notes the trend toward harmonizing crypto rules across jurisdictions in line with FATF and IOSCO guidelines. This means custodians operating in Asia increasingly adhere to international best practices on anti-money laundering (AML), risk management, and operational resilience. Such alignment is crucial for institutions that operate globally and require consistent regulatory environments for their custodial holdings.

In essence, progressive Asian hubs like Singapore and Hong Kong are creating regulatory sandboxes turned rulebooks that legitimize crypto custody for institutions. By enforcing rules on asset segregation, licensing custodial providers, and clarifying legal ownership of digital assets, these regulators are lowering the risks traditionally associated with crypto. This regulatory maturation is a key reason institutional adoption is accelerating – it provides the compliance and safety net that large investors and fiduciaries require.

Innovation in crypto custody platforms

The rise in institutional demand, combined with regulatory pressure for robustness, is fueling rapid innovation in crypto custody solutions. Consulting firm reports highlight that custodians in the digital asset space are evolving beyond basic safekeeping into full-service platforms that mirror the sophistication of traditional custodians – and, in some cases, offer new capabilities unique to digital assets. Several notable trends illustrate how crypto custody in Asia is innovating:

• Beyond Cold Storage – Value-Added Services: Initially, custody meant simply holding cryptographic keys offline (“cold storage”). Now, leading digital asset custodians are “expanding their role from just safekeeping of cryptocurrencies to also helping clients navigate and participate in new opportunities” like decentralized finance (DeFi), non-fungible tokens (NFTs), and even metaverse assets. This means an institutional client can custody its assets with a platform that not only secures them, but also provides access to staking services, DeFi yield pools, NFT marketplaces, and tokenized investments – all within a controlled, compliant environment. For example, several Asia-based custodians now offer staking and lending services on top of custody, enabling institutions to earn yield on their held assets. Trading and settlement networks integrated with custody are another innovation: one prominent platform (Fireblocks) provides an enterprise solution used by banks like BNY Mellon to securely hold assets in custody and seamlessly transfer them for trading within its network. This kind of infrastructure, which allows real-time movement of assets while in custody, is key for institutions that need both security and liquidity.
• Next-Gen Security Tech: On the technical front, institutional custodians are adopting a defense-in-depth approach leveraging cutting-edge technologies. Multi-signature authorization and multi-party computation (MPC)schemes are becoming standard – these require multiple private key “shares” or approvals to execute a transaction, greatly reducing single-point failure risk. Hardware security modules (HSMs), which are tamper-resistant devices for key storage, are widely used to protect keys from cyber threats. Many custodians also implement sharding (key splitting) and stringent operational controls (e.g. role-based access, whitelisted addresses, etc.) to prevent unauthorized access or insider misuse. Furthermore, insurance offerings are now common: institutional custody platforms often carry insurance policies to cover digital asset theft or loss, which is a critical assurance for risk-averse investors. All these innovations – from MPC to insured custody – aim to meet the “secure and compliant” standards that institutions expect. In Asia, where regulators often mandate high cybersecurity standards, local custodians have been early adopters of these technologies to win licenses and clients.
• Traditional Custodians Entering Crypto: A notable trend is the entry of established custodian banks and financial institutions into the digital asset custody space. Asia-Pacific’s booming demand has not gone unnoticed by incumbents. According to a 2024 report by Kapronasia, the regional digital asset custody market is projected to grow from about US$1.3 billion in 2023 to roughly US$4.7 billion by 2030, representing a massive new revenue opportunity for custodial banks. As a result, major institutions are launching services: for example, Standard Chartered’s affiliate Zodia Custody expanded into Singapore, DBS Bank (Singapore) offers institutional crypto custody via its DBS Digital Exchange, and Japan’s Nomura has set up a digital asset custody venture (Komainu). These firms leverage their trust brands and existing client relationships. However, entering crypto requires building new capabilities – “becoming a digital asset custodian bank means having the security and compliance capabilities to safeguard digital asset access,” holding private keys on behalf of customers and ensuring those assets remain safe from theft or loss. Traditional custodians are thus investing in technology or partnering with fintechs to meet this challenge. Their involvement is a strong signal of the asset class’s maturation. It also raises the bar for the industry: competition from household-name banks will push all custodians (new and old) to adhere to top-tier standards in governance, transparency, and risk management.
• Tokenization and New Asset Classes: Innovation in Asian crypto custody is also tied to the broader fintech trend of asset tokenization. By representing real-world assets (from bonds to real estate) as tokens on blockchain, a whole new category of custodial needs arises – someone must securely custody the tokenized assets on behalf of owners. Boston Consulting Group projects that tokenization of global illiquid assets could grow 50-fold by 2030 into a ~$16 trillion market, about 10% of global GDP. Asia is at the forefront of this trend (for example, Hong Kong and Singapore are piloting tokenized government bonds and funds). Crypto custodians are innovating to support tokenized securities alongside cryptocurrencies. This includes integrating with traditional financial market infrastructure (e.g. recognizing legal ownership of a token as equivalent to a physical asset) and developing smart-contract based custody that can handle corporate actions or compliance rules embedded in tokens. In short, custody platforms are evolving into universal digital asset vaults – capable of holding not just Bitcoin and Ethereum, but also tokenized stocks, bonds, and beyond. This opens the door for much broader institutional participation in blockchain-based markets, as virtually any asset can be held and transacted with the same security and ease as cryptocurrencies.

Case Study: building a secure and scalable crypto custody platform for institutional clients

As the demand for digital asset solutions grows among institutional investors, security, compliance, and usability remain non-negotiable. To meet these expectations, a major global british bank—via its innovation arm—partnered with VISEO to build a next-generation crypto custody platform encompassing a secure web portal and mobile application.

Initial challenges

The client sought to create a crypto custody platform that could deliver:

• Fast time-to-market through agile delivery
• Enterprise-grade security and modular architecture
• Traditional banking features layered on a blockchain-based infrastructure
• Seamless cross-border user access

Our approach

VISEO structured a multidisciplinary team across four countries, including UX researchers, UI designers, mobile and web developers, and QA engineers. Leveraging design thinking workshops, we co-designed a robust product roadmap with the client to define clear backlog priorities and ensure alignment with institutional expectations.

Key achievements

Agile Delivery with Kanban

Introduced a Kanban methodology enabling rapid, iterative delivery. Each feature underwent a complete monthly cycle—from ideation and design to validation and deployment.

Security by Design

Integrated third-party authentication and digital signature services into the mobile app, ensuring data integrity, non-repudiation, and protection against replay attacks.

Traditional Banking Controls Built into Blockchain

Extended the platform to include fraud management, user entitlement, audit trails, whitelisting, and cross-border compliance, blending the best of traditional finance with emerging crypto standards.

Global Delivery Model

Deployed a “follow-the-sun” delivery strategy with synchronized teams in the Philippines, Singapore, France, and the UK, ensuring uninterrupted development and client engagement across time zones.

Impact

This project resulted in a scalable, secure, and user-friendly crypto custody platform tailored for institutional clients. The collaboration demonstrated VISEO’s ability to bridge the world of traditional finance with cutting-edge blockchain capabilities, delivering a platform that is both future-ready and compliant with today’s most rigorous financial standards.

Conclusion: outlook for Asia’s Crypto Custody Landscape

Institutional crypto custody in Asia is poised for remarkable growth, underpinned by strong adoption, proactive regulation, and continuous innovation. Asian institutions – from hedge funds and family offices to insurance firms and banks – are increasingly viewing digital assets as a strategic allocation, cementing crypto’s status as “the new alternative” asset class. This is evident from the statistics: high adoption rates (with over 70% in some surveys) and plans for greater exposure ahead (over 80% planning increases) demonstrate that crypto is moving beyond a niche to an integral part of portfolios.

Crucially, regulators in key Asian markets are striking a balance between innovation and investor protection. By rolling out licensing regimes for exchanges and custodians, and by enforcing safeguards like asset segregation and capital requirements, regulators in Singapore, Hong Kong, Japan, South Korea, and others are building the necessary trust framework. As one whitepaper put it, trust is the cornerstone of sustainable growth in digital assets – robust risk management and clear accountability will distinguish the leading players. Asia’s regulatory trend is aligning with this principle, creating an environment where institutions can participate with confidence that the rules are known and risks mitigated.

On the industry side, the competitive landscape for custody is heating up. We see a convergence of crypto-native custodians, big tech platforms, and traditional banks all vying to provide secure custody solutions. This competition is yielding tangible benefits: more advanced security protocols, insurance coverage, integrated trading and DeFi access, and support for a widening array of digital assets. Investors now have a menu of institutional-grade custody options – from self-custody solutions with multi-sig control, to third-party specialist custodians, to offerings from global banks – all tailored to different risk appetites and use cases. The “flight to quality” noted by PwC means that only those custodians that can demonstrate top-notch security, regulatory compliance, and operational excellence will win out in the Asian market.

In conclusion, Asia’s institutional crypto custody landscape is dynamic and rapidly maturing. Supportive government policies and growing market infrastructure are reinforcing one another in a virtuous cycle. As digital assets continue to integrate with traditional finance (e.g. through tokenization and central bank digital currencies in the region), the distinction between “crypto custody” and “asset custody” will blur, with Asian financial centers likely at the leading edge of this convergence. For now, the region offers a compelling case study of how prudent regulation, combined with private-sector innovation, can unlock the potential of digital assets – turning what was once viewed as a risky experiment into a credible, scalable segment of institutional finance. The numbers tell the story, and they will continue to be closely watched as Asia paves the way in this crypto custody evolution.