This service aims to empower end consumers utilising platforms such as Revolut and Nubank to have complete control over their assets. This development is seen as a response to market demands in the aftermath of several crypto company failures last year.
By offering this non-custodial wallet service, Fireblocks allows fintech companies to free themselves from the role of custodians. Moreover, it simplifies the process for end-users to access various crypto offerings, including decentralised finance (DeFi) and other Web3 applications. Fireblocks representatives cited by coindesk.com explained the significance of this move and placed it in the context of well-publicised collapses of crypto firms such as Celsius, BlockFi, and FTX. These collapses caused the market sentiment to shift towards increased distrust in third-party custodians' ability to safeguard users' cryptographic keys.
Fireblocks employs multi-party computation (MPC) technology, which operates effectively in a non-custodial environment. This technology redistributes counterparty risk away from corporate entities while still allowing for wallet recovery in case of accidents or losses.
Fireblocks officials elaborated on the non-custodial approach highlighting its ability to allow a fintech, web3 company, or corporate to create a wallet where one of the key shares is with the user and the other key share is held by Fireblocks or the service provider. Essentially, the latter key share is responsible for security and the ability to recover the wallet if the client loses their phone, for instance.
Transferring custodial responsibilities from large companies to end-users also opens up opportunities for DeFi, Web3, and NFT-related offerings. Fireblocks believes that this shift can facilitate access to DeFi and other Web3 services that currently operate outside of well-defined regulatory frameworks. In essence, what was previously challenging for large licensed institutions or major corporations can now be integrated into the wallet experience, circumventing certain regulatory and custodial limitations.
According to coindesk.com, Fireblocks safeguards more than 130 million wallets for prominent companies, including BNY Mellon, BNP Paribas, Flipkart, eToro, Revolut, NuBank, and Wisdom Tree.
In July 2023, Fireblocks partnered with Brazil-based Nubank to expand the former’s blockchain-based product offerings. By integrating Fireblocks into Nubank, the neobank aimed to improve its existing custody capabilities by bringing enterprise-grade security and governance to its clients.
Specifically, the Fireblocks Network supports direct connectivity to liquidity providers, which fosters better settlement efficiency as well as improved operational security, and fewer manual processes and errors.
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