HSBC Embraces Digital Assets
HSBC recently announced its plan to offer custody services for tokenized securities, making it the latest major institution to embrace digital assets. The British bank will be using technology from Swiss crypto custody firm Metaco, which was recently acquired by blockchain startup Ripple, to store bonds and other securities.
The bank stated that the new service would complement its HSBC Orion platform for issuing digital assets and a recently-launched offering for tokenized physical gold. HSBC will utilize Harmonize, Metaco’s platform for institutions, to help unify security and management of digital asset operations.
Embracing Tokenized Securities
Tokenized securities refer to regulated assets such as bonds and equities issued in the form of tokens on a blockchain. Banks are leveraging blockchain for various purposes like payments, trading, and digitizing equities, bonds, and other assets without necessarily involving a digital token. This is different from the applications of bitcoin and other cryptocurrencies.
Increasing Demand for Digital Asset Custody
Zhu Kuang Lee, chief digital, data and innovation officer for securities services at HSBC, noted that the bank is seeing increasing demand for custody and fund administration of digital assets from asset managers and owners as the market evolves. Metaco CEO Adrien Treccani mentioned that financial institutions are ready to scale digital assets pilots to real use cases around custody, issuance, trading, and settlement of tokenized assets.
Hot Take: HSBC Continues its Digital Asset Journey
This move marks another step from HSBC toward embracing digital assets. With about $3 trillion in global assets, the bank already allows its Hong Kong clients to trade in bitcoin and ether exchange-traded funds.
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