HSBC Partners with Ripple-Owned Metaco for Institutional Custody Platform
Today, major global banking institution HSBC announced a partnership with Metaco, a tech firm owned by Ripple, to introduce an institutional custody platform for tokenized securities. With $9.1 trillion in custody at the end of 2022, HSBC aims to launch the new service in 2024, alongside its existing digital asset issuance platform, HSBC Orion, and its recently introduced gold tokenization solution.
Zhu Kuang Lee, chief digital, data, and innovation officer at HSBC, cited the “increasing demand for custody and fund administration of digital assets from asset managers and asset owners” as the driving force behind this move. Tokenized securities are based on blockchain technology and can be used to create digital versions of real-world assets like stocks, ETFs, or bonds. They can also be created for other types of assets that can be securitized, such as real estate or for raising capital.
HSBC Taps Metaco for Infra-Backing
As part of its new service, HSBC is collaborating with Metaco, which was acquired by Ripple in May this year in a $250 million deal and offers Harmonize, an institutional platform that enables secure and unified operations of digital assets. Adrien Treccani, CEO and Founder of Metaco, expressed excitement about working with HSBC and stated that custody infrastructure like Metaco’s Harmonize will be critical to how issuers and investors interact as capital markets and assets continue to be represented on distributed ledgers.
Decrypt has reached out to HSBC and Metaco for additional comments and will update this article should we hear back. The tokenization of securities is not a new venture for HSBC. Last week, the bank reported a successful trial of tokenized deposits with Ant Group, a leading Chinese financial services company. Earlier this year, the Hong Kong division of HSBC launched Bitcoin and Ethereum ETFs tied to futures contracts that trade on the Chicago Mercantile Exchange (CME).
Hot Take
HSBC’s partnership with Ripple-owned Metaco to introduce an institutional custody platform for tokenized securities demonstrates its commitment to meeting the increasing demand for digital asset custody services from asset managers and owners. This move also aligns with HSBC’s existing digital asset issuance platform and recent initiatives in gold tokenization. The collaboration with Metaco signifies a strategic move by HSBC to leverage DLT technology in asset creation and custody infrastructure.
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