Prime Trust, a digital custodian for cryptos, has decided to use a very curious strategy in order to boost its share of the market. Now, the company will completely stop charging to keep custody of digital assets from its clients.
The trust company from the state of Nevada has announced this measure today, January 31, and now all fees are effectively zero, just like what the company is charging for custody of stocks and bonds, too.
Last year was the first time that the company stored crypto assets. Its services of cold storage for Bitcoin, ERC20 tokens and Stellar Lumens, however, were paid. The fees generally range from 4 to 10 basis points per month but dropping the charges enabled the company to make the life of its customers easier.
The CEO of Prime Trust, Scott Purcell, has affirmed that there is no “qualified custodian” in the financial world. No one charges for keeping stocks, exchange traded funds (ETFs), bonds and real estate for other people. However, this is a reality in the crypto world.
Because of this, he wanted to follow the lead of other companies like Robinhood, Etrade and JPMorgan and to stop charging for these services. This would make the institutional and the retail clients of the company have a considerably easier life than they got so far and would make the company stand out among the other custodians of the crypto world.
The goal, as well as to make a difference in the market, is to actually make custodianship free something that is normal in this market.
Paying the Costs
Obviously, the money still has to come in some way for the operation to remain viable. It makes no sense to simply do everything for free if there is no business to be made.
According to the CEO of the company, however, the idea is to make money just like the other companies do, they offset the costs of custodianship with other services that they provide as well.
For instance, the institution can use the fiat money that the users deposit there to earn an interest rate while the money is stored. Many traditional banking firms do it and they make a hefty profit by keeping the money and using it for other services while the clients do not need that money.
At the moment, the company is also very keen on the idea of doing the same with digital assets and this is how the services can be profitable in the future. If you stake a token, for instance, you can earn interest in the same way that you would by using fiat.
Finally, the company also asks for a $50 USD fee for people disbursing their crypto assets, which would help to main the company afloat.