Self-custody is an arrangement in which the user directly controls the private keys or other signing credentials needed to authorize transfers of digital assets.
Self-custody removes a third-party custodian from the authorization process. The user is responsible for protecting keys, recovery information, devices, and transaction approvals. Software wallets, hardware wallets, and multisignature arrangements can all support self-custody if the user retains the relevant signing authority. The legal treatment of assets and obligations still depends on the transaction and jurisdiction.
Self-custody concerns control of transaction-signing credentials. It does not by itself determine the legal characterization of the asset or every ownership right associated with it.
The custody model determines who can authorize transactions and who bears operational responsibility if keys are lost, stolen, or misused.
A user can hold USDC through a hardware wallet whose private keys never leave the user's device or approved signing process.