(Bloomberg) -- Northern Trust Corp., which provides investment management, asset and fund administration services, is looking to get into the embryonic business of safeguarding digital assets such as cryptocurrencies.
The 129-year-old Chicago-based company has begun developing a way to secure digital assets held in custody while seeking to charge lower fees than existing crypto custodians, according to Pete Cherecwich, head of corporate and institutional business.
"The fees right now the custodians are charging are pretty high, not the same fees that we get –- ultimately, I believe unsustainable, because it needs to be an efficient model," Cherecwich said in an interview. Existing cryptocurrency custodians are charging multiple times more than traditional custodians to safeguard assets, Cherecwich said.
Companies like Coinbase Inc., BitGo and others have started offering or are close to offering custody services to institutional investors. Coinbase is taking on clients with a minimum of $10 million, and charges a $100,000 setup fee and 10 basis points in monthly fees.
Northern Trust already provides accounting services to a few funds that invest a small portion of their assets in cryptocurrency futures, Cherecwich said. Northern Trust won't put out a custody product for digital assets such as cryptocurrencies for at least another 12 months, he said.
To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, ;Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Andrew Dunn
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