HSBC taps Ripple’s Metaco to launch security token custody

cointelegraph.com:

Major global banking company HSBC plans to launch an institutional custody platform for tokenized securities, also known as security tokens.

HSBC has partnered with Ripple-owned tech firm Metaco to integrate its institutional platform Harmonize with HSBC’s new custody service for digital assets, the firm announced on Nov. 8.

The bank expects to roll out the new digital asset custody service in 2024, complementing its digital asset issuance platform known as HSBC Orion and HSBC offering for tokenized physical gold, launched on Nov. 1, 2023. Together, the services form a complete digital asset offering for HSBC’s institutional clients, the firm said.

“These services underscore HSBC’s commitment to the overall development of digital asset markets,” HSBC’s global head of digital assets strategy, John O’Neill, noted.

HSBC’s plans to launch digital asset custody came in response to the increasing demand for custody and fund administration of digital assets from asset managers and asset owners, according to HSBC’s head of digital, data and innovation, Zhu Kuang Lee. “This market continues to evolve,” Lee stressed, adding that asset servicers have never seen a “more important time to innovate.”

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A spokesperson for HSBC stressed in a statement to Cointelegraph that the upcoming digital asset custody platform for institutional investors would only cover security tokens and would not include cryptocurrencies like Bitcoin (BTC) and stablecoins like Tether (USDT). Unlike a pure cryptocurrency, a tokenized security is a digital representation of a security issued and moved on the blockchain.

HSBC has been seeking talent for its tokenized security division for a while.