Custody, long treated as a back-office line item, has become the front of the sales conversation for exchanges courting institutional mandates.
Several venues have moved to separate custody entities with their own balance sheets and reporting, a structure allocators increasingly require before signing.
Insurance capacity remains the constraint. Underwriters have expanded cover for cold storage but remain reluctant to write meaningful limits against hot wallet exposure, which caps how much of a client's assets can sit in trading-ready accounts.
Fee compression has accelerated the shift. With spreads narrow and execution broadly commoditised, custody and reporting quality are among the few remaining differentiators.
