Why trust is the key to crypto’s future in mainstream finance
Beyond the investment case, the technology promises faster settlement, lower transaction costs and more efficient ways to move money across borders.
The attraction is particularly strong in Asia, where businesses have long contended with fragmented banking systems and the delays and expense of correspondent banking. Stablecoin-based settlement offers the potential to move funds almost instantly, reducing reliance on intermediary banks and freeing up capital more quickly.
Yet many institutions have remained cautious, held back less by the assets themselves than by questions around compliance, insurance and fiduciary responsibility.
As regulatory clarity improves, attention is shifting from access to infrastructure. Custody is becoming the mechanism that could allow digital assets to move from the periphery of the financial system into diversified portfolios at scale.
Among the firms positioning to address that need is Kraken, which is aligning its custody offering with the governance, security and accountability standards expected by institutional investors.
“We believe digital assets should be part of any super fund’s asset holdings in the same way that you might have gold,” says Jonathon Miller, Kraken’s general manager for Australia and rest of world.
Miller says Australia’s evolving regulatory framework is providing the certainty institutional investors have long been waiting for.
“It brings long-awaited regulatory certainty to institutions who have been waiting on the sidelines,” he says. “They’ve been waiting for that.”
Jonathon Miller, Kraken’s general manager for Australia and rest of world.
For institutions, the issue is not simply whether digital assets offer returns, but whether they can be held within structures that satisfy the same fiduciary standards applied to traditional investments.
In Australia, super funds typically separate the roles of trustee, investment manager and custodian to ensure no single party controls all aspects of an investment. Miller argues that digital assets are now being adapted to fit within that established governance model.
“Every single client of Kraken’s custody service is in a fully segregated wallet environment,” he says. “You can independently verify that the assets are there.”
The custody platform also uses multi-party authorisation, insurance and bankruptcy-remote structures designed to protect client assets even if other parts of the business encounter financial difficulties.
Miller says direct custody arrangements can offer institutions an alternative to accessing digital assets through listed investment vehicles.
“We can do the same thing with a native holding of bitcoin in your own auditable blockchain address for half that cost,” he says, referring to the fees charged by some exchange traded funds.
Australia’s regulators have been moving resolutely towards bringing digital assets more firmly within the framework that governs traditional financial markets.
In April, the Australian Securities and Investments Commission outlined a roadmap for implementing the Corporations Amendment (Digital Assets Framework) Act 2026, which introduces licensing and operational standards for digital asset platforms and tokenised custody providers. The regime will come into full effect in April 2027 following an 18-month transition period.
“The new laws bring digital asset platforms and tokenised custody platforms under the financial services licensing regime,” ASIC says.
The regulator has emphasised that the same core principles that apply to traditional custodians should also apply to digital assets.
“The obligations on custodial or depository service providers are principles-based and apply to custody of any financial product, regardless of its form,” ASIC says in its guidance to the industry.
The shift is widely seen as an important step towards giving institutional investors greater confidence that digital assets can be held within familiar frameworks of governance, oversight and investor protection.
For Kraken, the opportunity extends beyond winning mandates from super funds. Miller says the company aims to provide the underlying infrastructure that could support a broader wave of digital asset innovation in Australia.
“It’s not just about landing the super funds,” he says. “We can be infrastructure providers for innovation in Australia.”
That ambition reflects a wider shift taking place across global finance.
As regulatory frameworks solidify and institutional-grade custody becomes more widely available, digital assets are increasingly being judged not by their novelty but by how effectively they can be integrated into the same trusted systems that govern conventional markets.
If the shift continues, the debate for institutional investors is likely to move beyond whether digital assets deserve a place in diversified portfolios to a more practical question: how to hold them safely, efficiently and within the same governance frameworks that underpin the rest of the financial system.
To find out more, please visit Kraken.
