Custodian refers to the business organization that holds the financial assets of its users in their custody. The custodian system is important for bringing forth simplicity and protection. For the most part, the assets and money of users are usually held by a brokerage firm, bank, or other similar custodian organization.
Custodians provide several services including account management, transaction settlements, tax simplicity, and everything else to safeguard their clients' assets. On the contrary, with cryptocurrencies, holders possess keys to their blockchain addresses which reflect on their wallets. Custodians of cryptocurrency use a combination of hot and cold wallets, which are secured by a cryptocurrency exchange known as ‘Digital asset Custodian’.