Stablecoin and Crypto Asset Wallet Types: Custody and Security Requirements

Another great publication from CyAN member Kamran Israr Mirza (Kim), find him on LinkedIn at https://www.linkedin.com/in/kimabdalian/

Stablecoins have moved from experimental instruments to core payment infrastructure, and with that shift, wallet architecture and key custody have become the highest-stakes control domain a CISO owns. This white paper sets out the five recognized wallet classes, from hot wallets to HSM-backed custody, and the four custody models’ institutions choose between, with the regulatory posture now pushing most institutions toward hybrid custody built on multi-party computation and hardware security modules.

It maps these controls against the five frameworks most relevant to a regulated institution today: PCI DSS v4.0, ISO/IEC 27001:2022, ISO/IEC 42001:2023, NIST CSF 2.0, and the EU AI Act, including the June 2026 Digital Omnibus amendments that pushed back the AI Act’s high-risk system deadlines. Following the Digital Omnibus on AI approved by the European Parliament in June 2026, compliance obligations for standalone high-risk AI systems under Annex III (the category most custody-monitoring tools would fall under) were deferred from 2 August 2026 to 2 December 2027, with Annex I product-related obligations deferred to August 2028. Stablecoin reserve security, mint and burn governance, and independent attestation are covered alongside the key management lifecycle that underpins them all.

The paper closes with six board-level recommendations, from mandating hybrid custody as the institutional default to bringing AI-enabled monitoring tools into the same governance register as the wallets they protect.