HSBC Collaborates with Ripple-Owned Firm for Blockchain Venture
HSBC recently announced its partnership with a Ripple-owned firm to provide blockchain services for institutional clients looking to host real-world assets on-chain. The bank plans to launch a digital asset custody service in 2024, in collaboration with Swiss firm Metaco, which was acquired by Ripple for $250 million in May 2023.
This new offering aims to create a comprehensive platform, integrating digital asset issuance and tokenization of physical gold, providing eligible investors with access to traditional investment vehicles on blockchain networks. However, the custodial service will not support crypto tokens or stablecoins at this time.
According to Zhu Kuang Lee, an executive at HSBC, there is a growing demand for custody and fund administration of digital assets from asset managers and owners, prompting the need for innovative and collaborative solutions.
Banks Embracing Blockchain Solutions
Several other banks are also venturing into blockchain applications for commercial purposes. JPMorgan reportedly facilitates $1 billion in daily transactions through its JPM Coin payment channel, while Deutsche Bank has disclosed plans for a tokenization service and custodial product for digital assets.
In addition to these developments, HSBC has made efforts to revamp London’s gold market infrastructure and introduced Bitcoin and Ethereum ETFs for Hong Kong traders following local authorities’ push for banks to onboard crypto clients.
Hot Take: Banks Embracing Blockchain Technology
As the demand for digital asset custody and tokenization services continues to grow, traditional banks like HSBC are recognizing the potential of blockchain technology to meet the evolving needs of institutional clients. This collaboration between HSBC and Ripple-owned Metaco reflects the increasing integration of real-world assets into blockchain networks, marking a significant shift in the financial industry’s approach to digital assets.
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