Digital security provider Gemalto has announced a partnership with Ledger, a firm with deep expertise in cryptocurrencies and blockchain applications. The two firms plan to deliver "high-assurance security infrastructure for crypto assets applications". In its simplest terms, this is a system that will allow fund managers and custodians to securely manage any investment products based around cryptocurrencies, or to simply hold a range of cryptocurrencies - which are now an asset class of their own, with a global market capitalisation of US$137 billion, compared to US$7.8 trillion for gold and US$83.8 trillion for the global stock market. Ledger has developed an operating system for managing cryptocurrency which can be integrated to any secure element, either a secure chip (similar to those used in credit cards and passports, for example) or a hardware security module - a physical computing device that safeguards and manages digital keys for strong authentication. What Ledger has done in partnership with Gemalto is, instead of integrating its cryptocurrency management system into a secure chip, the operating system is integrated into a standalone piece of hardware, the HSM. Gemalto is supplying its HSM, with Ledger providing the operating system to securely manage cryptocurrencies. Both firms claim complementary client bases: Gemalto works with traditional banks and traditional hedge funds, while Ledger has been attracting emerging types of financial sector players such as crypto hedge funds. Eric Larchevêque, CEO at Ledger, explained: "As the market value of blockchain based solutions rises, so does the need for bank grade security products." He said Ledger was already "working with some customers" - this is a new product, adding to the existing galaxy of asset classes in the market for fund managers to invest in on behalf of their clients. Larchevêque said the first target market for this product would be the institutional investment sector and hedge funds. "Any financial institution will need to properly manage cryptocurrency as an asset. And a fund manager or a custodian will need the authority to approve the transfer of the asset." Larchevêque was quick to add, though that the Ledger system was not intended to substitute fiat currencies (eg, dollars, francs, euros) with cryptocurrencies.  There is also some work yet to be done in setting up a cost structure: "It can be a variable fee of a few basis points, based on assets under management, or a fixed fee, if we're talking about a much deeper integration," he said. Todd Moore, senior vice president of encryption products at Gemalto, believes that the technology will have relevance beyond the financial services market. "We are also working with Ledger to integrate [its blockchain system] into any device's secure element and bring high-assurance security to markets like smart energy applications, home automation or wearables." Larchevêque indeed has ambitions to create applications for the Internet of Things and peer-to-peer transactions using this technology, although he conceded that for such products, the time to market is "more like a matter of two to five years away."