Crypto Custody: Should Institutions Build or Buy Their Way to Security?

A crucial decision for banks, hedge funds, and asset managers shaping the future of digital asset management.

Introduction

“Should we build our own custody infrastructure or buy from an established provider?”
That’s the critical question posed by Scalable Solutions in a recent LinkedIn post—a question becoming increasingly urgent as institutional interest in digital assets hits historic highs. Their post cuts through the noise to spotlight a decision with multi-million-dollar consequences for today’s financial giants.

Background & Context

Scalable Solutions, a global leader in digital asset infrastructure, posted this timely reflection amid growing institutional movement into cryptocurrencies and blockchain-based assets. As more banks, funds, and asset managers explore digital opportunities, the issue of how to securely manage these assets—whether by building proprietary solutions or outsourcing custody—has taken center stage.

The post’s timing is significant. With stricter regulations emerging worldwide and security threats increasing, institutions are under pressure to make strategic custody decisions quickly and wisely.

Main Takeaways / Observations

1. Cost of In-House Custody is Prohibitive
According to Scalable Solutions, building an in-house custody solution could cost 5 to 10 times more than outsourcing to a regulated provider—a staggering figure that changes the conversation for many institutions.

2. Security and Regulation Are Key Drivers
Maintaining control sounds attractive. Yet, the complexity of regulatory compliance and the high stakes of digital security often make third-party custody a safer, smarter path.

3. Strategic Focus Matters
Institutions are reminded that focusing internal resources on core business operations—rather than building custody infrastructure from scratch—could offer a faster and more sustainable path into the digital asset economy.

4. The Market Maturity Signal
The post hints at a broader trend: institutions are no longer asking if they should enter digital assets, but how. Custody decisions are now operational priorities, not hypothetical discussions.

Community Reaction

While the post has a focused, professional tone, its traction suggests that decision-makers in finance and fintech are engaging deeply with the build vs. buy debate. The community’s interest points to growing awareness of the operational challenges that come with digital asset management.

Our Perspective / Analysis

From a legal and business advisory perspective, the question Scalable Solutions raises is spot-on.
Building in-house custody demands substantial investments in cybersecurity, regulatory licensing, insurance coverage, disaster recovery, and constant upgrades—a burden that many institutions underestimate.
At the contract level, outsourcing custody also raises important negotiation points: service level agreements (SLAs), liability limitations, compliance warranties, and breach notification protocols must be carefully crafted.

Ultimately, the smarter institutional move often lies in strategic partnerships with regulated custodians—aligning business agility with legal safety.

Call to Reflection or Action (Closing)

For institutions standing at the crossroads:
If you had to choose today, would you bet your digital future on building from scratch—or would you leverage the strength of those who have already mastered the custody game?

Click here to visit LinkedIn post