Account Credit - Can any Custodian create any kind of Instrument Holdings freely?

Hi,
I’ve been digging into the crediting flow of Holdings and as far as I can see any Custodian of an Account (along with the owner authorization) might create Holdings of an Instrument without the Issuer authorization. Am I missing something?

Disclaimer: I’m not familiar with processes for creation of Instrument Holdings.

Thanks!

Hi @jvelasco.intellecteu,

What you state is correct: an (unlocked) holding has two signatories, namely the custodian and the owner.

Holdings represent financial obligations between a custodian and an owner. The instrument referenced by a holding determines what these obligations are (e.g., currency tokens, shares, bonds, …). The authorisation of the instrument issuer is generally not required.

An analogy to a real-world example is the following:

• we can write on a piece of paper that I owe you 100 USD (we are creating a holding where I am the custodian and you the owner)
• the authorisation of the Federal Reserve (the issuer of the USD instrument) is not required for this

I hope that clarifies your question.

Matteo