Coinspeaker
HSBC and Ripple’s Metaco to Launch Tokenized Securities Custody Service for Institutional Clients
HSBC Holdings (LSE: HSBA), in partnership with Ripple Labs subsidiary Metaco, has announced plans to launch a digital assets custody service for institutional clients. The service will offer custody for assets such as tokenized securities and is expected to launch next year. It will complement HSBC’s Orion digital assets issuance platform and its recently launched gold tokenization platform to form a complete digital asset offering for institutional clients.
Chief Digital, Data and Innovation Officer, Securities Services at HSBC, Zhu Kuang Lee, said of the offering:
“We’re seeing increasing demand for custody and fund administration of digital assets from asset managers and asset owners, as this market continues to evolve. Through key partnerships, HSBC is delivering the next-generation custody infrastructure that will be scalable and secure. For asset servicers, there has never been a more important time to innovate, to collaborate and to create change.”
HSBC, which is one of the largest banks in the world, revealed that for now, its custody plans involve “tokenized securities issued on third-party platforms, e.g., private and/ or public blockchain compatible tokenized bonds or tokenized structured products (not for custody of cryptocurrencies or stablecoins).”
Metaco CEO and Founder Adrien Treccani also commented on the partnership: “Metaco is excited to be working with HSBC as it continues to explore the applications of DLT in asset creation and custody. Custody infrastructure such as Metaco’s Harmonize, which integrates with financial institutions’ existing systems, will be critical to how issuers and investors interact, as capital markets and assets in general continue to be represented on distributed ledgers.”
The banking and finance industry has been gradually integrating blockchain technology with tokenization and digital asset custody being the focus of many new products and offerings. Ripple estimates that the institutional crypto custody market will reach almost $10 trillion by 2030.
So far, major financial institutions like JPMorgan and Deutsche Bank have harnessed and commercialized blockchain applications. In October JPMorgan revealed that its JPM Coin payment system now handles transactions worth $1 billion daily. Before that, in September, Deutsche Bank announced a partnership with Swiss fintech firm Taurus to develop digital asset custody and tokenization services for its clients.
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HSBC and Ripple’s Metaco to Launch Tokenized Securities Custody Service for Institutional Clients