Giving institutions confidence to store and manage tokens

Problem

Digital asset holders face critical security vulnerabilities, with billions lost to hacks and mismanagement. Institutions lack enterprise-grade custody solutions that meet compliance standards, while complex key management, counterparty risks, and inadequate insurance coverage also prevent mainstream adoption.

Solution

BitGo leverages Hedera to provide secure, regulated digital asset services. The Hedera network’s predictable fees, high throughput, and governing council structure enable BitGo to offer institutional custody and financial services while maintaining compliance standards. As a Council member, BitGo actively helps shape enterprise adoption of the Hedera network.

After evaluating how digital assets are maturing and where the market is going, we looked at the things that make the Hedera network unique – the throughput, efficiency, predictable cost of transactions, plus having nodes run by the governing council instead of anonymous entities – and it aligns perfectly with where we see digital assets going.

Frank Wang

Executive Director, Head of Fintech Sales

Building a foundation for institutional digital assets

BitGo started as a software company with the aim to help founder and CEO Mike Belshe’s network of early adopters of Bitcoin securely hold this net new asset. The company’s initial goal was to develop the first multi-signature wallet for Bitcoin, or a “two of three” key management system that provided both a layer of security and redundancy that was lacking in the market at the time.

This security model was chosen specifically because multi-signature (multi-sig) functionality was natively supported on Bitcoin. The “two of three” approach meant that users needed two out of three keys to sign a transaction, providing both security and a safety net – if one key was lost, the assets could still be accessed using the other two keys. This solution addressed both the security and usability challenges that were limiting cryptocurrency adoption.

Building a regulated custody framework

As the crypto market evolved, BitGo recognized that institutional investors needed more than just secure software – they required regulated solutions. This led BitGo to transition from a pure software provider to a US federally regulated custodian. This move was strategic, as it provided clients with the assurance that their digital assets were being held by an entity overseen by recognized regulatory bodies.

The company’s commitment to operating within strict regulatory frameworks has become a critical part of their success. Rather than establishing themselves in a jurisdiction with lighter oversight, the company has deliberately established a presence in markets with strict regulatory requirements. They’ve secured licenses in New York, which has one of the most rigorous state-level regulatory frameworks for digital assets in the US, and expanded internationally with regulated entities in Germany, Denmark, Switzerland, Singapore, and Dubai.

Evolving to a complete digital asset platform

Their evolution from a Bitcoin wallet provider to a comprehensive digital asset platform has been one step ahead of the cryptocurrency ecosystem as a whole. The company’s journey has been marked by a strategic expansion of service offerings that are built on their foundation of secure custody.

A crucial aspect of BitGo’s growth has been their careful evaluation and integration of various DLT networks. The company applies rigorous criteria when deciding which protocols to support, looking beyond immediate financial incentives and assessing the long-term viability of potential networks. This led to their integration with Hedera in 2021, a decision driven by both technical and philosophical alignment.

Advancing web3 through Hedera governance

The company’s decision to join the Hedera Council in February 2024 marked a significant deepening of their commitment to the network. This move was not taken lightly, as Wang explains: “Our joining the Council was very much a calculated decision. We’re constantly pulled in multiple different directions, and deciding to join the Council wasn’t necessarily a ‘yeah, let’s just do it and see what comes of it’ kind of decision. It was very thought out and done with extremely high levels of confidence in Hedera.”

They saw the Council membership as an opportunity to play a more active role in shaping the future of enterprise-grade DLT solutions. BitGo demonstrates this commitment by running their own Hedera node on their infrastructure.

The growing Hedera ecosystem has proven to be very attractive for financial services applications. The network’s combination of high performance, security, and regulatory compliance has made it an ideal platform for institutional adoption. BitGo has leveraged their position to help guide projects toward the Hedera network, acting as a valuable channel partner for the ecosystem.

BitGo’s Vision for the Future on Hedera

BitGo sees Hedera as a foundational network for the next wave of financial services, enterprise adoption, and real-world asset tokenization, citing its security, scalability, and predictable fees as major advantages. The company’s upcoming custody support for HBAR ETFs reflects rising institutional interest and reinforces its long-term commitment to the ecosystem. BitGo also views Hedera as an ideal platform for tokenized loyalty, consumer data sovereignty, and interoperable brand engagement, unlocking new business models powered by fast, low-cost transactions. In the RWA space, BitGo believes Hedera is uniquely positioned to support tokenization across asset classes, while private network options like HashSphere open the door for regulated institutions needing privacy with public-network trust guarantees.

Why Hedera

The Hedera network stood out to BitGo for several key reasons. First, its unique technical architecture offered superior throughput and efficiency, with predictable transaction costs – crucial features for institutional adoption. Second, Hedera’s focus on utility rather than speculation aligned with BitGo’s vision for the future of digital assets.

Hedera’s governance model also provides an additional layer of compliance assurance, as Wang notes:

 “One of the most appealing things about Hedera is that the network nodes are run by the Hedera Council, so you don’t have anonymous – or even worse – potentially sanctioned individuals or entities running nodes, and therefore earning fees off of a transaction.”