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Custody models overview

Rehive is the ledger and application layer on any store of value.

Michail Brynard avatar
Written by Michail Brynard
Updated over a week ago

Rehive does not manage end-user funds directly. Instead, we provide the tools for our clients to act as custodians for their users. Our clients typically integrate with underlying store-of-value providers such as banks, blockchain networks, or payment gateways.

While account balances and transactions are represented on the Rehive ledger, the actual funds are stored in external accounts like bank accounts or cryptocurrency addresses.

User balances in Rehive can be linked to an external store-of-value in two ways: a one-to-one mapping (segregated accounts) or a many-to-one mapping (omnibus accounts). The implementation of cash-in and cash-out processes varies depending on the chosen custody model.

One-to-one (Segregated Accounts)

Every account on Rehive represents an individual account with the store-of-value provider (e.g., a bank). The balance in each Rehive account exactly matches the balance of the corresponding account in the store-of-value provider’s system. This approach typically requires more stringent licensing and regulatory compliance.

Key Points:

  • Direct mapping between Rehive accounts and external accounts.

  • Enhanced regulatory scrutiny.

  • Clear separation of user funds.

Many-to-one (Omnibus Accounts)

The funds related to multiple Rehive accounts are stored in a single account with the store-of-value provider (e.g., a bank or blockchain). It is the company’s responsibility to ensure that all user funds are accurately accounted for, meaning the sum of all balances in Rehive must match the balance in the external account. This approach is also known as an FBO ("for benefit of") structure.

Key Points:

  • Aggregated funds from multiple users in one external account.

  • Easier to manage but requires rigorous internal accounting.

  • Commonly used for simplified cash flow management.

Notes on Custody Models

  • Omnibus Approach: Users deposit funds into a single company bank account using their unique Rehive account reference to identify the transaction. This can be tested in the Rehive Apps.

  • Segregated Approach: Users deposit funds into unique bank accounts associated with them on the backend, using their unique Rehive account reference to identify which account to credit.

To reiterate, Rehive is a software service provider specializing in transaction systems and is not licensed as a financial services provider. Clients using Rehive must meet any regulatory or licensing requirements applicable to their business model and jurisdiction.

For more detailed information, you can explore our documentation on custody models.

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