A crypto wallet doesn't store currency the way a physical wallet stores cash. Instead, it stores the cryptographic keys that prove you own certain funds on the blockchain. The critical distinction between wallet types comes down to one question: who controls those keys?

Custodial Wallet

With a custodial wallet, a third party — typically a centralised exchange like Coinbase or Binance — holds your private keys on your behalf. You access your funds with a username and password, much like a bank account.

• Easy onboarding — familiar login experience for new users

• Password recovery is possible if credentials are forgotten

• The exchange can freeze, restrict, or close your account

• Platform insolvency or a hack puts your funds at risk

⚠️  Key Principle

"Not your keys, not your coins." With a custodial wallet, you're trusting a company with full control of your assets. Many long-term crypto users prefer to keep meaningful holdings in non-custodial wallets.

Non-Custodial Wallet

With a non-custodial wallet, you alone hold your private keys. No platform, company, or government can access or freeze your funds without your explicit action.

• Complete ownership and control of your assets at all times

• No platform risk — you're never exposed to an exchange's financial health

• Losing your seed phrase means permanent, irrecoverable loss of access

• Requires personal responsibility for security and backups

Popular non-custodial wallets include MetaMask, Phantom, Trust Wallet, and Brave Wallet — the most common wallets used in KIRAPAY's checkout flow.

For KIRAPAY Merchants

Customers paying via KIRAPAY typically use non-custodial wallets. Our checkout supports 500+ wallet types and handles the connection automatically — no technical setup required on your end.

For receiving your settlements, we recommend a non-custodial wallet for full control over your funds.

Check our full blog post know more about custodial vs non-custodial wallet: https://blog.kira-pay.com/custodial-vs-non-custodial-wallets-who-holds-your-crypto-5bf324e7c233