custodial wallet

custodial wallet

A cryptocurrency wallet that is maintained by a third party, which is typically a crypto exchange. Coinbase is an example of such an exchange (see Coinbase).

Confusing Perhaps?
The term "custodial" is misleading. When users manage their own wallets, such wallets are said to be "non-custodial." However, if users manage the wallets that hold the private keys to their crypto assets, are they not the custodians of their funds? Unfortunately, well-thought-out terminology has never been a primary goal in the technology world. See crypto wallet, crypto exchange and crypto glossary.

Copyright © 1981-2025 by The Computer Language Company Inc. All Rights reserved. THIS DEFINITION IS FOR PERSONAL USE ONLY. All other reproduction is strictly prohibited without permission from the publisher.