A non-custodial wallet service is being provided by cryptocurrency custody company Fireblocks to its extensive list of fintech and corporate clients so that end users of companies like Revolut and Nubank can fully control their own assets. This move has become necessary in the market as a result of the collapse of several crypto firms last year.
According to Fireblocks CEO Michael Shaulov, the move frees up fintechs from automatically acting as the custodians of end users and makes it simpler for those people to access exotic cryptocurrency solutions like decentralised finance (DeFi) and other Web3 applications.
The industry has changed as a result of well-publicized failures of cryptocurrency companies like Celsius, BlockFi, and FTX, as well as a general aversion to the idea of third parties holding users’ cryptographic keys.
Shaulov highlighted in an interview that Fireblocks’ multi-party computation (MPC) technology performs well in a non-custodial scenario, transferring counterparty risk away from a corporate body while enabling wallets to be recovered in the event of an error.
“This non-custodial release allows a fintech, web3 company or corporate to create a wallet, where one of the key shares is sitting with the user – either in their web browser or mobile app, with iOS and Android – and the other key share is held with Fireblocks or with the service provider,” Shaulov said. “In essence, that other key share is in charge of security and the capacity to restore the client’s entire wallet, for instance, if he loses his phone.”
The upside of shifting custodial obligations from large corporations to end users is that it makes additional DeFi, web3, and NFT-related offerings possible, according to Shaulov.
“A fully non-custodial setup where the customer is hosting the key, allows access to DeFi and other web3 services that are currently outside of a well-defined regulatory scope,” said Shaulov. “When firms don’t have all those regulatory, custodial limitations,” says the author, “the wallet experience can be built onto what was previously difficult for large licenced institutions or big corporates.”
Over 130 million wallets are currently protected by Fireblocks for major corporations like BNY Mellon, BNP Paribas, Flipkart, eToro, Revolut, NuBank, and Wisdom Tree.