Stablecoin Payments Glossary
Custodial Wallet
A custodial wallet is a wallet in which a third-party provider controls the private keys on behalf of the user.
Explanation
Custodial wallets are commonly offered by exchanges, payment applications, and fintech providers. They can simplify user experience but require trust in the intermediary to safeguard funds and execute transactions properly.
Why it matters
Custodial wallets can accelerate adoption but increase intermediary dependence and operational risk.
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