With the passage of the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) in July of 2025 and the possible enactment of the CLARITY Act (Digital Asset Market Clarity Act), many traditional financial services companies are evaluating plans for a production environment for services related to digital assets. These include:
The GENIUS Act requires reserve backing, audit rights, and redemption guarantees that will directly shape bank product design and partner selection. In February 2026, the Office of the Comptroller of the Currency (OCC) issued a detailed proposed rulemaking, covering licensing, reserve maintenance, redemption, capital adequacy, and risk management. As the primary and most expansive federal banking regulator, and the only federal licensing path for nonbank issuers of stablecoins, the OCC was comprehensive in setting a template, which the FDIC and Treasury have since followed with their own GENIUS Act proposed rules. Our portfolio company Metrika filed a persuasive comment letter on the OCC’s proposed rule. Read Metrika’s letter to the OCC.
The DTCC is also moving from planning to execution. In December 2025, its subsidiary DTC received a three-year SEC no-action letter to run a tokenization pilot for DTC-custodied assets (Russell 1000 names, equity ETFs, and U.S. Treasuries) on the Canton Network, anticipated to be launched later this year.
Because DTCC sits at the center of settlement activity, this shift is already prompting banks across the U.S., Canada, and Europe to begin planning their required digital infrastructure. As DTCC tokenizes U.S. Treasuries, equities, and other assets, it is enabling a set of new business use cases:
Related initiatives on Canton include Broadridge’s DLR, noted above, and the London Stock Exchange Group’s (LSEG’s) Digital Settlement House (DiSH), launched by LSEG to provide a 24/7 commercial-bank-money cash leg for FX and digital asset settlement.
Resiliency expectations are becoming equally explicit. DTC’s tokenization pilot, for example, will be governed by its internal resiliency framework, which rates every system on one of two internal tiers that set how fast it must recover and how much data it can lose in an outage.
From these processes, the requirements for enterprise-grade infrastructure are becoming more clear. In the sections that follow, we review the use cases banks are building toward and the core components of an enterprise infrastructure that meets both the regulatory requirements and risk management objectives of financial firms.
Before addressing infrastructure, it is important to ground the discussion in the use cases banks are building toward. Each imposes distinct requirements on custody, compliance, and settlement infrastructure.
Enabling clients to hold digital assets, including stablecoins, in segregated, bank-custodied accounts, using HSMs (Hardware Security Modules; a physical device which protects private keys) or MPC (Multi-party Computation; which allows multiple participants on a blockchain to “sign” a transaction) key-management architectures that meet OCC standards.
Offering clients execution services for digital assets. Requires pre-trade compliance screening, real-time Anti-Money Laundering / Know Your Transaction (AML/KYT) monitoring, and integration with regulated execution venues or crypto-as-a-service providers.
Enabling yield and managed-investing products beyond execution. For example, zerohash’s Staking-as-a-Service lets platforms offer staking via a single API and its Portfolio Strategies extends this to managed investing, letting platforms allocate clients into rules-based crypto portfolios through one atomic workflow.
Accepting digital assets as collateral for lending. Requires real-time valuation feeds, automated margin call workflows, and collateral segregation that satisfies both prudential and OCC custody standards.
Using stablecoins as a settlement rail for treasury management, cross-border payments, and real-time clearing. Requires fiat on/off-ramp connectivity, batch and sponsored transfer capabilities, and automated reconciliation with general ledger systems.
Issue, distribute, trade, settle, and manage tokenized financial assets including funds (such as BlackRock’s BUIDL), securities, and RWAs. Requires lifecycle management, issuer controls, transfer restrictions, and interoperability with existing infrastructure.
The following capabilities represent the operational infrastructure required to support digital asset activities under OCC expectations. They track the six layers of the digital asset security stack, a decision framework articulated by our portfolio company Circuit: key management, hosting and infrastructure, access and transaction controls, monitoring and compliance, incident response and recovery, and insurance and risk transfer. Each maps to specific operational risk domains and control requirements.
One caveat runs across the stack. Every layer above key management assumes the key is secret, so a break in the underlying cryptography removes them all at once rather than one at a time. This is not theoretical. A March 2021 Coldcard firmware error left private keys reconstructable from public blockchain data, and more than $100 million has been swept since 30 July 2026 in transactions that were cryptographically valid and indistinguishable from legitimate transfers. Incident response is the only layer still operating in that case, which is what Circuit’s product is built for.
Where Circuit’s stack organizes the security controls, Metrika, another Nyca portfolio company, organizes the corresponding risk exposures into a parallel six-domain framework: network, smart contract, staking and DeFi, centralization, market, and reputational and compliance risk, which are mapped into the institution’s own Risk Management Framework.
Together they have a security stack for the controls, and a risk stack for the exposures those controls are meant to contain. To connect those capabilities to regulated execution, zerohash provides the regulated operational layer, orchestrating execution, settlement, liquidity, and blockchain connectivity so that businesses can deploy digital asset capabilities at scale.
This layer covers where private keys live and how they are protected. Banks choose between HSM-based custody and MPC or threshold architectures that spread key shares across independent parties. OCC guidance requires controls on par with existing customer-asset safeguards, including air-gapped or policy-gated connectivity and documented key ceremonies. Most institutions combine three dimensions: Architecture pairs multisig for governance with MPC for throughput. Protection uses FIPS-certified HSMs for cold storage and secure enclaves for the warm and hot tiers, where policy gating compensates. Connectivity keeps reserves air-gapped while gating working capital by policy.
The environment in which custody and signing systems operate. Large banks with existing data centers often deploy on-premises from day one for full sovereignty over key material. Mid-sized banks may start with cloud HSM or cloud MPC to accelerate time-to-market, then migrate on-prem as volume justifies it. OCC expectations require documented infrastructure controls regardless of deployment model: access management, change control, and business continuity planning.
Policy engines control who can move which assets and under what conditions. Typical rules include M-of-N quorum approvals, address whitelists, velocity limits, amount-based escalation, and segregation of duties. These correspond to OCC requirements for internal controls and dual control over high-risk transactions. More advanced setups also apply time-locks and cooling-off periods to large transfers or transfers to new destinations, controls on smart-contract interactions (limiting which functions can be called and checking contract state before execution), and distinct approval workflows for hot, warm, and cold storage.
On-chain visibility (transaction surveillance, sanctions screening, anomaly detection) and off-chain observability (access logs, system health, configuration drift). Pre-integrated AML/KYT providers such as Chainalysis and TRM Labs are standard. Second-line risk must have independent dashboard access and authority to halt transactions.
Transaction-level AML/KYT does not cover the deeper infrastructure layers like network, smart contract, staking, centralization, market, and reputational and compliance risk. Our portfolio company Metrika provides second-line monitoring, streaming 4,000+ real-time risk indicators and severity-tagged alerts into controls and workflows.
Operational wallets need flexibility and can rely on probabilistic risk warnings when touching external counterparties. Reserve wallets should not transact outside the institution’s perimeter and warrant deterministic controls.
When monitoring flags an anomaly, the system responds automatically. It sweeps funds to isolated recovery wallets, backs up and rotates keys, and fails over operations. OCC guidance calls for written incident response plans that have been tested in tabletop exercises. Well-run programs go further and write separate playbooks for each threat they face, such as signer compromise, key loss, insider threat, vendor or custody failure, and operational outage, and they set RTO and RPO targets for each one. Circuit, one of our portfolio companies, works here. It relies on recovery transactions that are signed and validated in advance, so assets can be pulled out even if key management, infrastructure, or access controls go down.
The financial backstop for residual risk. Defensible controls across the preceding capabilities are prerequisites for meaningful coverage from specialty carriers and Lloyd’s syndicates, and insurability assessments increasingly reference OCC posture. Coverage spans crime, specie (loss or destruction of keys and the assets they control), and cyber / tech E&O. Pricing stays elevated as underwriters build comfort, but defensible controls, paired with validated response tooling such as Circuit’s, can reduce premiums materially.
Banks face three primary paths to digital asset custody, each suited to different regulatory environments and operational maturity levels. Custodian model selection is a critical architectural decision that determines operational flexibility, key sovereignty, and the migration path toward full on-premises control.
| Sub-custodian | On-Prem Build | Cloud MPC / HSM | |
|---|---|---|---|
| How It Works | Out-source to a regulated specialist (e.g., Coinbase Prime, Anchorage, BitGo, Protego) | Deploy custody infrastructure on bank-owned hardware (e.g., Ripple Custody, Taurus, Blockdaemon) | Hosted digital asset infrastructure including wallets, execution, settlement, compliance and MPC/HSM key management e.g., Fireblocks, Utila, Dfns, zerohash |
| Best For | Speed to market. Institutions that prefer to delegate key management to a regulated third party | Full sovereignty mandates. Best for banks with existing data center operations and security infrastructure | Fast deployment with institutional-grade security; banks seeking a path from cloud to on-prem |
| OCC Considerations | Third-party risk management requirements apply; bank retains supervisory responsibility for outsourced functions | Highest degree of control, aligns with OCC expectations for direct custody of customer assets | Meets FIPS requirements. Banks must document controls over cloud provider and key management vendor |
Most banks will start in the cloud and progressively move toward greater infrastructure control. The critical architectural question is whether the chosen platform supports this migration without requiring a rebuild at each stage.
| Cloud HSM | Bank-Hosted HSM | Full On-Prem | |
|---|---|---|---|
| Keys | FIPS 140-2 L3 certified cloud HSM; no hardware to manage | Bank racks own HSMs on-prem; vendor software in cloud | All keys and infrastructure in bank’s data center |
| Governance | Vendor-hosted policy engine with bank-defined rules | Bank controls hardware; vendor manages orchestration layer | Policy engine, compliance, and orchestration all on-prem |
| Timeline | Weeks | Weeks to months | 6-12 months |
| OCC Alignment | Meets FIPS requirements; requires vendor due diligence documentation | Physical key custody satisfies heightened supervisory expectations | Full sovereignty; zero cloud dependency; strongest control posture |
Beyond custody and key management, banks require a full operational layer to run stablecoin and digital asset services at production scale. The following capabilities represent the baseline for institutional deployment.
The choice of settlement layer is becoming as consequential as the custody and compliance decisions above. As banks and asset managers move digital asset services into production, the network they settle on will shape cost, speed, privacy, and counterparty risk, and those choices are hard to reverse once systems are built on top of them. The stakeholders active in this space fall into three groups, which differ in what they provide and where they sit in the stack.
Individual companies build products, rails, and applications on top of these networks, including many of the portfolio companies profiled below, along with stablecoin issuers and payments providers extending into digital assets. They drive usage and distribution, though they rely on the networks to actually clear and settle transactions.
Protocol chains are the public and semi-public networks institutions can build on directly. These include Layer 1 networks, which settle transactions on their own base infrastructure (Ethereum, Solana, Circle’s Arc, the Stripe- and Paradigm-backed Tempo, and Canton), and Layer 2 networks, which run on top of a Layer 1 and inherit its security while lowering cost (Base, which sits on Ethereum). Some are general-purpose, some are payment chains sponsored by a single company, and some, like Canton, are built around institutional privacy. The open question is whether liquidity consolidates onto a handful of these networks or are split across many, and whether institutions will settle on a network controlled by a single commercial player or hold out for more neutral ground. Network choice also carries resiliency risk. Our portfolio company Metrika monitors network health and performance as financial market infrastructure across these chains, giving institutions the operational evidence to judge which settlement layers meet the recovery standards the DTC framework sets out above.
Consortiums are the banks’ own answer, shared infrastructure that keeps money and settlement inside the regulated perimeter rather than ceding it to non-bank issuers, including Fnality, Cari, and Kinexys. They bring trust, balance sheets, and regulatory standing, and they are the most likely place for central-bank-backed cash and tokenized deposits to settle at scale.
In the end, the question is which model of trust institutions are willing to settle on, and that answer will probably differ by use case instead of landing on one winner. Retail and cross-border payments may lean toward company-run or public chains, while wholesale settlement and tokenized securities are likely to stay closer to bank consortiums.
Above all, privacy will drive institutional adoption more than raw throughput. Banks and asset managers cannot operate on fully transparent ledgers that expose their positions, trading flows, and client activity to competitors and the broader market. At the same time, they have to protect client confidentiality while giving regulators the selective visibility they require. In order for networks to gain real institutional traction they will need to let institutions keep sensitive data private while still proving compliance to supervisors. Interoperability will also matter for similar reasons, as assets and liquidity are spread across networks that institutions need to move between, but privacy will be crucial in separating the networks that reach production.
Our view of what a bank’s digital asset architecture should look like, laid out as eight layers from product use case down to the settlement network.
| Layer | NYCA Portfolio | Outside Nyca Portfolio (Non-Exhaustive) | Description |
|---|---|---|---|
| Bank Focused Turnkey Platforms | — | Stablecore, Omnia | Specifically focused on embedding digital assets into the bank’s operations |
| Product Use CasesBuy / Sell / Trade | zerohash | Coinbase, Talos, Paxos Crypto Brokerage | Execution and smart-order routing that lets clients trade crypto |
| Product Use CasesYield & Managed Investing | zerohash | Figment, Blockdaemon | Turning idle assets into return. Running staking and managed strategies on the client’s behalf |
| Product Use CasesLending & Collateral | — | Anchorage Digital, BitGo, Coinbase | Borrowing and lending against crypto with bank-grade collateral custody and valuation feeds |
| Product Use CasesStablecoin Settlement | zerohash | Fiserv, Anchorage Digital, Fireblocks, BitGo | Moving value between institutions over stablecoin/tokenized deposit rails |
| Product Use CasesTokenized Assets | zerohash | Securitize, Ondo, Taurus, Tokeny | Issuing and servicing on-chain versions of real-world assets across their lifecycle |
| Orchestration & Core Ledger | Thought Machine, Transcend, zerohash | Fireblocks, Dfns (orchestration / rails); Temenos, Ripple | The middleware and system-of-record wiring apps to chains, custodians, and the core banking ledger |
| Custody & Key Management | Protego, Utila | Coinbase Prime, Anchorage, BitGo, Fireblocks, Ripple | Safeguarding private keys and digital assets via qualified custody, MPC, and HSMs |
| Fiat On / Off Ramps & Payments | zerohash | Circle, Paxos, Fiserv | Converting between fiat and crypto and moving money in and out of the system |
| Compliance & Risk | Chainalysis, Sardine, Metrika | TRM Labs, Elliptic | KYC/AML, transaction monitoring, sanctions screening, and real-time risk feeds |
| Security, IR & Insurance | Circuit | OpenZeppelin, Halborn, Hypernative, Proof | Protecting the stack, smart-contract audits, formal verification, incident response, and coverage |
| Settlement Networks | — | Ethereum, Solana, Base, Canton, Arc, Tempo (chains); Fnality, Kinexys, Cari (consortium); Circle | The base chains, L2s, and interbank networks where transactions finalize, plus node/RPC access |
Security and incident response layer operating across any custody stack. Provides automated breach response and positions custody architecture for insurance coverage and risk transfer.
Developer infrastructure for wallet and token operations. Abstracts blockchain complexity so enterprises can integrate stablecoin wallets, payments, and tokenized asset distribution through standard APIs.
Blockchain analytics and compliance platform. Provides the on-chain intelligence layer for transaction monitoring, sanctions screening, and regulatory reporting.
Real-time digital asset risk management. The platform is purpose-built to give institutional risk teams a single, live view of risk across every asset, network, and DeFi application they hold or service. Critical for institutions scaling custody, tokenization, and stablecoin operations under growing regulatory scrutiny.
OCC-chartered digital asset trust company. Provides a federally regulated custody and compliance framework purpose-built for institutional digital asset activities.
Payments risk and fraud prevention platform. Provides real-time risk decisioning for fiat-to-crypto and crypto-to-fiat flows-a critical complement to on-chain analytics for end-to-end transaction risk management.
Cloud-native core banking and payments platform acting as the central nervous system, multi-rail orchestration engine, and single source of truth to run any type of digital and fiat money transactions on a unified ecosystem. Banks can seamlessly connect to on-chain wallet infrastructures and launch stablecoin and digital asset services without maintaining separate crypto sidecar ledgers, enabling them to process any payment type, from any system, anywhere in the world.
Transcend has built a Digital Orchestration layer through vendor partnerships with Wallet & Key Management companies, saving time it takes GSIBs to onboard DeFi infra.
Institutional-grade wallet infrastructure. Provides wallet, compliance, and operational infrastructure for institutional stablecoin, tokenization, and custody workflows, with flexible deployment models. Also serves as a backup wallet layer for multi-vendor redundancy.
Regulated financial infrastructure for digital assets, enabling enterprise companies across verticals to launch trading, stablecoin payments, tokenization, and custody products through a single compliant (API) integration. zerohash abstracts licensing, liquidity, settlement, compliance, and blockchain connectivity so that businesses can bring digital asset products to market with speed and confidence.
We plan on sharing our perspective in the near future.