Switzerland: CMTA Introduces New Standards for Digital Assets Custody and Management
Switzerland’s Capital Markets and Technology Association (CMTA), a not-for-profit and non-governmental association focused on formulating standards for the use of blockchain technology in capital markets, has issued fresh open industry standards for digital assets custody and management.
New Crypto Assets Custody Standards
As stated in its press release, the Capital Markets and Technology Association (CMTA), a not-for-profit organization dedicated to bringing together players from various sectors of the Swiss economy including financial, technological, and legal, has for the first time issued a Digital Assets Custody Standard (DACS).
The CMTA’s DACS are requirements and recommendations designed to govern tech solutions facilitating the custody and management of digital assets. The document aims to set clear guidelines for digital assets management and custody in terms of minimum security and operational requirements.
Specifically, the CMTA has described some digital assets custody models in its DACS, including the Pooled Digital Ledger Accounts (DLAs), and Allocated Digital Ledger Accounts, Sub-custody, and Private DLAs, among others.
Financial institutions such as banks can operate self-custody their digital assets via a digital ledger account managed with different DLA models. However, other players in the financial industry such as pension funds will need to work with a qualified digital assets custodian that meets a set of requirements, to store users’ assets.
Commenting on the development, Fedor Poskriakov, General Secretary at the CMTA, and Partner at Lenz & Staehelin reiterated that the creation of DACS is a significant milestone as the digitalization of the capital markets is now gaining momentum.
In his words:
“Digital Assets Custody Standard represents a key milestone, as it is the first initiative of the Swiss financial industry to agree on a common standard for custody and management of digital assets. This will greatly contribute to the emergence of fully digital capital market infrastructures, including integrated custody and secondary trading venues.”
In addition to establishing a uniform standard for digital assets custodians, the DACS also provides baseline requirements and recommendations for the generation, storage, and recovery of private keys in a secure way.
Also commenting on the exciting initiative, Dr. Jean-Philippe Aumasson, Tech Committee Chair at the CMTA noted that the DACS will bring the much-needed “maturity in the technological and procedural aspects of digital assets custody.”
Switzerland has been at the forefront of blockchain technology and cryptocurrency innovation in recent times, attracting a good number of blockchain startups to the region including Facebook’s Libra Association.