HSBC’s Move into Digital Assets Custody
HSBC recently announced its plans to provide a custody service for digital assets, including tokenized securities. This initiative, set to launch in 2024, will be in partnership with Metaco, a Swiss-based digital asset custody and trading firm owned by Ripple.
In a statement, HSBC’s Chief Digital, Data and Innovation Officer for Securities Services, Zhu Kuang Lee, highlighted the increasing demand for custody and fund administration of digital assets from asset managers and owners. The move is part of HSBC’s commitment to delivering scalable and secure next-generation custody infrastructure through key partnerships.
The new service will utilize Metaco’s Harmonize solution and will complement HSBC’s existing digital assets issuance platform, HSBC Orion. It also aligns with the recent launch of HSBC’s tokenized gold system leveraging distributed ledger technology.
Blockchain Adoption Among Legacy Banks
HSBC’s move reflects a trend among major banks like JPMorgan and Deutsche Bank, which have been actively commercializing blockchain applications. JPMorgan recently revealed that its JPM Coin payment system now handles $1 billion in daily transactions, while Deutsche Bank partnered with Swiss fintech firm Taurus to develop digital asset custody and tokenization services for its clients.
Ripple’s acquisition of Metaco for $250 million signals its expansion into institutional custody services. However, Citigroup announced a review of its partnership with Metaco after previously working on its own digital assets custody services with the firm.
Hot Take: A Game-Changing Move for HSBC
HSBC’s entry into digital assets custody represents a significant step forward for the banking giant as it positions itself at the forefront of the evolving market for blockchain-based financial services. The move not only demonstrates HSBC’s commitment to developing digital asset markets but also underscores the growing interest among traditional financial institutions in leveraging blockchain technology to drive innovation and efficiency.
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