HSBC Announces Tokenized Securities Custody Service in Partnership with Ripple

HSBC partners with Ripple’s Metaco to launch tokenized securities custody service.
The service complements HSBC’s blockchain initiatives and supports digital asset markets.
The move reflects a growing trend of legacy banks adopting blockchain technology.

HSBC is making a significant move into the world of digital assets. It just announced a partnership with Metaco, a Swiss-based crypto infrastructure firm owned by Ripple, to launch a custody service for tokenized securities.

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This bold step into the future of finance is part of HSBC’s broader blockchain strategy. In detail, it is set to be introduced in 2024 for its institutional clients, according to an official statement.

HSBC acknowledges the increasing demand for digital asset custody and fund administration services as the market evolves. The bank’s Chief Digital, Data, and Innovation Officer for Securities Services, Zhu Kuang Lee, stated, “Through key partnerships, HSBC is delivering the next-generation custody infrastructure that will be scalable and secure.”

The new service relies on Metaco’s Harmonize solution and builds upon HSBC’s existing digital assets issuance platform, HSBC Orion. It also complements the recent launch of HSBC’s tokenized gold system, which leverages distributed ledger technology to digitize ownership of gold.

Global Head of Digital Assets Strategy, Markets, and Securities Services, John O’Neill, expressed his enthusiasm for the forthcoming custody service and its role in complementing HSBC’s commitment to digital asset markets.

Adrien Treccani, Founder and CEO of Metaco, highlighted the momentum behind asset tokenization and the potential it holds for financial institutions. He noted that Metaco’s platform is well-suited for top-tier banks and global custodians, as it seamlessly integrates with existing governance and risk management processes.

HSBC joins the league of major banks embracing blockchain technology, following in the footsteps of JPMorgan and Deutsche Bank. These banks have been rapidly commercializing blockchain applications to streamline their operations. Notably, JPMorgan’s JPM Coin payment system now handles $1 billion in daily transactions.

Ripple’s acquisition of Metaco for $250 million has marked its entry into institutional custody services. The acquisition positions Ripple uniquely to address the growing institutional crypto custody market, which is expected to reach nearly $10 trillion by 2030, as stated by Ripple President Monica Long. However, Citigroup is reevaluating its partnership with Metaco after initially collaborating on digital assets custody services.

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Lauren Cole

A focused and vigilant storyteller for all things blockchain and cryptocurrency. Besides consuming every piece of literature about the metaverse, she can often be found at industry convections looking for the latest scoop.