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The United States might soon establish a Bitcoin-exclusive trust company, as revealed by BitGo and Swan Bitcoin on September 15. The collaborative effort is awaiting regulatory approval, according to a statement from the companies.
The upcoming organization will perform functions typical of a trust company, such as Bitcoin custody, administration, and management for its beneficiaries. Cory Klippsten, CEO of Swan, mentioned that the initiative aims to provide Bitcoin custody without the complications associated with holding other altcoins concurrently.
"For years, we have received feedback from significant clients, partners, and various Bitcoin firms expressing a preference for a Bitcoin-only software and services framework that concentrates solely on optimal custody utilizing Bitcoin’s distinctive attributes,” Klippsten stated.
The companies are engaging with state regulators regarding their plans but have not yet submitted a request for regulatory approval, Klippsten informed Cointelegraph. “We are assessing acquisition options first,” he revealed.
As part of our long-term strategy to promote Bitcoin adoption, we’re announcing a significant advancement for Swan and the broader Bitcoin ecosystem:
BitGo and Swan Announce Plans for USA’s First Bitcoin-Only Trust Company— Swan Bitcoin Adoption Team (@SwanBitcoin) September 14, 2023
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BitGo provides security and custody for digital assets, supporting more than 30 cryptocurrencies according to its website. In contrast, Swan’s operations are entirely focused on Bitcoin, enabling users to invest in Bitcoin through one-time and recurring purchases, with record custody managed by Fortress Trust and Bakkt, while BitGo serves as a cold storage custodian.
The new initiative aims at institutional investors, including asset managers, pension funds, family offices, as well as governments and corporate treasuries. It will provide cold storage, fraud prevention, Anti-Money Laundering (AML), and Know Your Customer (KYC) protocols, among other Bitcoin-related services.
Institutional investors in the cryptocurrency sector represent a rapidly expanding market in the United States, particularly as the largest asset managers globally seek regulatory approval for a spot Bitcoin exchange-traded fund (ETF). Several prominent Wall Street firms offer cryptocurrency custody solutions to institutional clients, including Bank of New York Mellon and Deutsche Bank.
"We believe there is a strong possibility that multiple ETFs will receive approval in 2024, leading to a new influx of participants in the Bitcoin market looking for established, reputable, and technologically adept partners for various requirements,” explained Swan’s CEO. The Securities and Exchange Commission has postponed decisions regarding the spot Bitcoin product. Analysts anticipate that the regulator may delay a decision until early 2024 as deadlines draw near.
<p“Over the past year, our teams have collaborated closely on developing more robust qualified custody models. Early in 2023, we identified the opportunity to create a Bitcoin-only custodian, merging the unique strengths of each company and supporting the innovators who will lead the charge in advancing Bitcoin adoption,” remarked Mike Belshe, CEO of BitGo.
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