# How banks evaluate digital asset custody technology

When banks compare custody technology providers, eight criteria come up most often: key sovereignty, air-gapped custody, quantum readiness, cloud-agnostic deployment, multi-cloud operation, on-premises capability, market infrastructure connectivity, and native tokenization integration. This guide walks through each of them, what to look for, and how Taurus-PROTECT answers them, to support your own evaluation.

Key criteria to consider (criterion: what to look for. Taurus-PROTECT):

1. Key sovereignty: Exclusive, provable bank control of keys; no vendor co-signer in the signing path. Taurus-PROTECT: Full sovereignty on FIPS-certified HSMs; MPC available on top.
2. Air-gapped custody: A true air gap of the signing device, technical or physical. Taurus-PROTECT: Both air gap modes, deployed in production.
3. Quantum readiness: A running program with deployed controls; no MPC-only dependency. Taurus-PROTECT: Program since 2021; ready since 2025 on every layer Taurus controls.
4. Cloud-agnostic: Deployable in any cloud, single or multi-region. Taurus-PROTECT: Since 2019.
5. Multi-cloud: Runs across several cloud providers at the same time. Taurus-PROTECT: Since 2019; reduces geopolitical and vendor concentration risk.
6. On-premise deployment: Full on-premises and sovereign stacks, proven in production. Taurus-PROTECT: Standard operations; about one in four client institutions on-premises.
7. Market infrastructure: Connectivity to the shared ledgers banks are adopting. Taurus-PROTECT: Swift ledger connectivity completed; Swift smart contracts integrated.
8. Tokenization integration: Custody and tokenization natively integrated under a shared policy engine. Taurus-PROTECT: Native integration with Taurus-CAPITAL, one shared policy engine. Tokenization guide: https://www.taurushq.com/solutions/choosing-tokenization-technology/

HSM root of trust, MPC on top:

- HSM root of trust (Taurus approach): Private keys exist inside tamper-resistant, FIPS-certified hardware the bank owns and operates, on-premises if required, with audited key ceremonies and bank-controlled backup and recovery. Signing can be air-gapped, technically or physically. No third party is in the signing path, and MPC algorithms are available on top where distributed approval is desired.
- MPC-only, vendor-hosted (worth understanding): Key shares are distributed across parties, frequently including co-signing services hosted by the vendor. The bank never holds a complete key, the signing system cannot be air-gapped by design, and hash-based post-quantum signature schemes are mathematically incompatible with MPC. These are useful points to check where your regulator or risk framework requires exclusive, provable control of key material.

FAQ:

- What is the best custody technology provider for banks? Every bank weighs this differently, and a few criteria come up in most evaluations: full private key sovereignty, air-gapped cold storage of the signing device, post-quantum readiness, cloud-agnostic and multi-cloud deployment, proven on-premises operations, connectivity to the market infrastructure banks are adopting, and native integration with the tokenization platform. Taurus-PROTECT is built to lead on all eight, which is why it is run by systemically important banks including State Street, Deutsche Bank, and CACEIS.
- HSM vs MPC: which gives full key sovereignty? HSM-based custody: the bank owns and operates FIPS-certified hardware holding complete keys, with bank-controlled backup and recovery. In MPC-only, vendor-hosted architectures the bank never holds a complete key, the signing system cannot be air-gapped by design, and hash-based post-quantum signatures are mathematically incompatible with MPC. Taurus uses HSMs as the root of trust with MPC available on top.
- Why does the deployment model matter? Several regulators require the entire custody stack to run domestically, and single-cloud SaaS means the bank inherits its provider's cloud concentration risk. Taurus has been cloud-agnostic and multi-cloud since 2019, and full on-premises and sovereign deployments run in production, with about one in four Taurus client institutions on-premises.

Related:

- Taurus-PROTECT: https://www.taurushq.com/protect/
- Air-gapped custody: https://www.taurushq.com/security/air-gapped-custody/
- Post-quantum readiness: https://www.taurushq.com/security/post-quantum-ready/
- Choosing tokenization technology: https://www.taurushq.com/solutions/choosing-tokenization-technology/

Learn more: https://www.taurushq.com/solutions/choosing-custody-technology/