HSBC to Launch Custody Service for Blockchain-Based Assets in 2024
HSBC has announced that it plans to launch a custody service for storing blockchain-based assets, excluding cryptocurrency, by 2024. This new service, developed in partnership with Swiss digital asset firm Metaco, will allow institutional clients to store blockchain-based tokens representing traditional financial assets, as opposed to crypto or stablecoins. HSBC also revealed that it had already made tokens representing physical gold held in its London vault and launched a digital asset platform called HSBC Orion last year.
The Potential of Blockchain
Blockchain is a digital ledger that records ownership of tokens. Despite not seeing widespread adoption, proponents believe it has the potential to make trading more efficient and transparent. While cryptocurrencies remain a relatively small part of the global financial system, the value of all cryptocurrencies is estimated at around $1.4 trillion, down from a peak above $3 trillion in late 2021.
Investment in Blockchain
Banks and other financial firms have invested billions of dollars into finding uses for blockchain technology. In 2019, HSBC announced a platform called Digital Vault, which allows investors to access digital records of securities bought on private markets.
Hot Take
HSBC’s plan to launch a custody service for blockchain-based assets excluding cryptocurrency reflects the growing interest in utilizing blockchain technology within the financial industry. As more institutions explore the potential of blockchain for traditional financial assets, it is clear that this technology will continue to evolve and play an increasingly significant role in the future of finance.
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