Blockstream launches Bitcoin custody system with Thales for institutional security

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Blockstream Bitcoin custody launch

Highlights

Blockstream launched an institutional digital asset custody platform with Thales, integrating Thales hardware security modules and Blockstream's Secure Multi-Party Computation technology.
Blockstream CEO Adam Back argues cold storage with offline signing reduces exposure to cyberattacks compared to internet-connected custody systems, referencing the Binance hack as a cautionary example.
The launch intensifies competition in the crypto custody sector as providers race to offer institutional-grade solutions balancing security, regulatory demands, and usability amid advanced threats and AI risks.

Custody platform design and launch

As reported by Cointelegraph, Blockstream has launched an institutional digital asset custody solution built with French technology group Thales and announced the system on Friday.

The platform combines Thales hardware security modules with Blockstream's Secure Multi-Party Computation technology, which the company says allows institutions to authorize transactions while keeping sensitive cryptographic operations inside dedicated security hardware. Blockstream says this differs from more conventional MPC setups, where parts of the signing process may take place outside protected hardware environments.

Adam Back, Blockstream's co-founder and chief executive, says many existing MPC protocols are too complex and require too much communication between devices to work well for fully offline cold storage. He argues that this complexity limits their practicality for institutions seeking simpler custody arrangements with lower exposure to network-based attacks.

Cyberattack risks and industry implications

Back points to the Binance hack, which he describes as a warning for internet-connected custody infrastructure, and argues that keeping signing devices offline can help reduce the risk of unauthorized access. He says connected systems remain vulnerable even when protected by firewalls because attackers may still gain entry to networks or obtain credentials they should not have.

He also says artificial intelligence could make custody security harder to manage by helping attackers identify subtle implementation flaws in complex MPC systems. In his view, institutions should adapt by moving more assets into cold storage, because simpler security architectures are better suited to withstand AI-assisted attack methods.

For the broader crypto custody sector, the launch highlights growing competition around institutional-grade infrastructure as providers try to balance usability, regulatory expectations and protection against increasingly advanced threats. Back's position is that reducing operational complexity, rather than adding more layers of interaction, offers a more durable model for safeguarding Bitcoin holdings.

We recently wrote about crypto exchange trust, as Traders Union research found many investors still consider centralized platforms safe despite hacks.

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