How is token custody handled for RWAs?
Token custody for real-world assets involves secure storage and legal management of the physical asset. Custodians, escrow services, or legal entities hold the asset while tokens represent ownership. Blockchain records token transactions, but custody ensures the real asset remains secure and properly managed. Custodians provide verification and audits to confirm asset existence and condition. Smart contracts may control token transfers and income distribution, but custody ensures real-world enforceability. Proper custody reduces fraud risk and ensures investor confidence. When tokenizing RWAs, choosing a trusted custodian and implementing clear legal agreements is essential to maintain asset security and compliance.
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