Future of Custody: How Fireblocks is Redefining Security for Digital Assets

Recap the key points from REDeFiNE TOMORROW 2023 by SCB 10X with Michael Shaulov, CEO and Co-founder of Fireblocks, and go in-depth with Zack Rosen, Investor at Ribbit Capital, on the subject of "Future of Custody: How Fireblocks is Redefining Security for Digital Assets."

Rosen began by highlighting the significance of cryptocurrencies, which top-tier companies cannot avoid. Additionally, Fireblocks is in a position to help facilitate this impending change. Shaulov, who has a strong background in the cyber security field, mentioned the potential of Fireblocks in securing blockchain transactions and facilitating Web3 capability access.

Previous changes and growth in financial institutions

Shaulov divided the significant growth into two groups by referring to the previous fascinating changes and growth in the cryptocurrency world as follows:

•  Web3, in order to create new experiences in the internet age, such as the capacity to create ownership, the rise in the value of intellectual property, and the response to brands in new forms, lots of startups and well-known brands have begun to design products that utilize NFT.
• Traditional financial institutions, particularly those located outside of the US, are more keenly interested in cryptocurrencies. They become attracted to digital assets like token-based financial products, green bonds, and carbon credits.

Additionally, the demand for asset custodians has grown as a result of a reduction in potential risk between the parties. Part of it is caused by earlier damages, such as the FTX and Celsius incidents. Any activity involving assets, such as the release of NFT, Stablecoin, or working with smart contracts, can be made more secure with the support of digital asset custodians.

Challenges for financial institutions entering the cryptocurrency market

Shaulov talked about the difficulties traditional banks will encounter when trying to enter the cryptocurrency market. The main challenges are building a sustainable business, advancing technology to quickly handle change in the blockchain, or converting normal financial institutions to blockchain-based ones. By acting as a business consultant with a top-notch team of specialists, Fireblocks is attempting to manage these challenges and support financial institutions. It also makes use of technology created to help them operate efficiently.

Fireblocks has provided full support throughout the operation cycle by helping the institutions with risk guarantees for businesses, assessing the potential for growth up until a complete production, and abiding by the law. As a result, Fireblocks is a pioneer in facilitating conventional financial institutions to enter the market for digital assets.

Fireblocks has been significantly growing in the market due to the offering of several products and services, such as asset custody and Web3 qualification support. A wide range of services leads to advantages in a highly competitive market.

Shaulov shared more about the Fireblocks platform qualifications, stating that the wallet infrastructure is reliable and conforms with regulations to reduce the possibility of risks between the parties, user error, or hacking. Two years ago, the company put more emphasis on Web3 capability, particularly in NFT and tokens.

In response to the changing demands of a large number of users, Fireblocks has modified the role of asset custodians to decrease potential risks between the parties, increase the capacity of asset custody, permit the secure use of assets, and emphasize the significance of smart contracts. Furthermore, Shaulov pointed out the challenges that banks and financial institutions face when attempting to enter the cryptocurrency market, including asset distribution, investment, and the transformation of obsolete technology. By providing business advice and supplying technology that enables quick development for clients, Fireblocks can deal with these issues.

Handling risk and security

In this industry, security and risk management are crucial. Fireblocks has made significant investments in infrastructure, cutting-edge technology, and support systems that collaborate with top-tier businesses and the GRC team, a risk management team made up of former personnel of central banks. This is done in coordination with supervisory authorities to help them understand the latest technologies and familiarize them with these new infrastructures.

Interesting use case

Shaulov expressed his excitement for the application of non-financial cryptocurrencies in Web3, such as games with virtual items or game economies that receive positive reviews, as well as marketing and branding. A change has also been made to the core business model. He presented "TravelX" as an example of a concept that transforms an outdated business model into a brand-new application, including a simulation of an airline ticket through tokenization to establish a secondary market for the exchange or transfer of tickets.

Specific requirements for each business

Rosen emphasized the unique requirements of each business. For example, a business with a financial focus has extraordinary needs for security and risk management. The business requirement is more extensive for Web3 businesses or NFT. Security, according to Shaulov, is still crucial. Furthermore, he observed that most well-known brands are concerned about the challenge of facilitating simpler user access as well as the risk of reliability, including the management of wallets and technical flaws that could lead to scams. While startups will emphasize speed, the ability to reach reasonable prices, and collaboration with trusted traders.

Shaulov provided in-depth information by pointing out that businesses must be prepared for impending changes by the time the world has entered the Web3 era, including security, reliability, and suitable partners, such as Fireblocks, which is prepared and plays a significant role in this transformation.

Shaulov has long emphasized the value of security maintenance during the system and architectural design phases. The next stage of business restructuring in this area must make sure that the secured infrastructure is taken into account. This is due to the fact that in the past, larger, and more established companies were frequently targeted by hackers, which resulted in the loss of massive amounts of money.

Appealing technology or evolution that may have an impact on the cryptocurrency industry in the future

Shaulov talked about the importance of collaboration between blockchain and wallet development for actual compatibility as well as the need for mechanisms that are extensive and capable of locating what is lacking. As a result, more powerful and adaptable blockchain technologies may emerge in the future. Additionally, there is a need to adapt new infrastructure, while interesting technologies like ZK Roll-Ups and MPC innovation are essential and being pushed for use. The ability to use programmable rules and regulations for different applications is another appealing and developing issue. Thus, the search for technology that can operate in accordance with the law is important for use in more contexts.

Watch reruns :  https://youtu.be/V1Qp7e4FspA