Non-custodial, explained
Non-custodial describes an arrangement where a service does not hold the user's spending keys or equivalent control of the funds in question.
- The field
- Payment
- Reading time
- 1 minute
- In this entry
- Meaning · relevance · limits
The meaning
Non-custodial describes an arrangement where a service does not hold the user's spending keys or equivalent control of the funds in question.
Why it matters
The user must protect keys and recovery material. A merchant receiving a payment can still control the funds after receipt.
The boundary
Review the actual flow; a non-custodial label does not remove dependencies, metadata or user responsibilities.
Key control is not the whole threat model
A wallet owner controls the private keys rather than giving a payment intermediary authority to spend their funds. They must protect those keys, backups and recovery material themselves. This custody property does not guarantee anonymity, remove token-issuer controls or make a transfer reversible after the wrong address or network is chosen.
- Keep recovery material offline and test recovery without exposing the seed to a website or support agent.
- Evaluate blockchain visibility, software trust and token contract controls separately from custody.