The move will free up big fintechs from acting as custodians and makes it easier for their end users to access DeFi and other Web3 applications, Fireblocks said.
Fireblocks, a cryptocurrency custody company, now provides a non-custodial wallet service to its extensive roster of fintech and corporate clients. This offering empowers end consumers who utilize platforms such as Revolut and Nubank to have complete control over their assets, addressing a market demand that emerged after several crypto industry setbacks last year.
This shift removes the obligation for fintechs to serve as custodians for end users. As a result, it facilitates end users’ access to diverse crypto offerings, including decentralized finance (DeFi) and various Web3 applications, as highlighted by Fireblocks CEO Michael Shaulov.
After the notable failures of cryptocurrency companies such as Celsius, BlockFi, and FTX, the market has undergone a transformation fueled by a widespread distrust in third-party custodians’ ability to safeguard a user’s cryptographic keys.
Shaulov explained that Fireblocks’ multi-party computation (MPC) technology performs effectively in a non-custodial environment. It redistributes counterparty risk away from corporate entities and, simultaneously enables the recovery of wallets in case of any mishaps.
“This non-custodial offering enables fintechs, web3 companies, or corporations to establish a wallet. In this setup, one of the key shares resides with the user, accessible through their web browser or mobile app on iOS and Android, while Fireblocks or the service provider safeguards the other key share,” explained Shaulov. “This additional key share assumes the responsibility for security and the capability to recover the entire wallet in scenarios like the loss of the client’s phone.”
Shifting custodial responsibilities away from big companies and onto the end user has the added advantage of opening the door to more in the way of DeFi, web3 and NFT-related offerings, Shaulov said.