If they screw up (in this case Citiybank) then holders will have someone to blame and get their money back, probably with a fee on Citybank because big players can force favorable rules. So the custodian gets paid a decent amount an they have an incentive to do well because otherwise they are fucked.
i'm not so sure. it'll be a while before we get the details on this, but it'll probably be like ETFs. language about high risk, trustee losses may be irreversible, etc. i'm still amazed at the idea of high volume bitcoin insurance for these kinds of trusts. i'd love to get a look at the premiums. when something goes wrong (trustee gets hacked or something), it'll make for an interesting and precedent-setting court case.
I don't see anything wrong with this. Let people choose to hold their own coins or pay someone else to do the task for them. As you said the point of bitcoin is to hold it yourself but as you also said we can not avoid this and we shouldn't even bother.
it's unavoidable. just saying, it's certainly not a
good thing. a lot of people are going to get fucked by custodial losses st some point.