HSBC Announces Plans to Launch Digital Asset Custody Service in Partnership with Metaco
HSBC Holdings aims to introduce a custody service for digital assets, catering to institutional clients seeking exposure to tokenized securities.
The global bank will offer the new service in collaboration with Metaco, a technology firm owned by Ripple Labs, according to a Wednesday report by Bloomberg.
The upcoming custody offering, expected to go live in 2024, will complement HSBC’s existing digital assets issuance platform, known as HSBC Orion.
Just last week, the bank launched a system for issuing tokenized gold, which uses distributed ledger technology to represent ownership of physical gold stored in its London vault through digital tokens.
HSBC’s foray into blockchain-based applications follows a trend among major financial institutions seeking to commercialize this technology after years of testing its potential in the realm of cryptocurrencies.
JPMorgan Chase & Co recently implemented its first collateral settlement for clients using blockchain, while Euroclear introduced a platform for issuing traditional securities via blockchain.
For nearly a decade, banks, asset managers, and market infrastructure providers have invested significant resources in adapting blockchain to streamline complex processes and reduce costs.
However, the industry is yet to realize substantial benefits from these efforts.
The latest launches, including HSBC’s upcoming custody service, may serve as a testing ground for assessing the utility of blockchain technology.
Custody services have emerged as a focal point for major players in the industry, offering opportunities for startups while underscoring the challenges faced by smaller firms seeking partnerships with established financial institutions.
Ripple, which agreed to acquire Metaco in May,
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