HSBC to Launch Digital Assets Custody for Tokenized Securities
Banking giant HSBC Holdings has announced plans to offer digital assets custodial services for tokenized securities. The company will be collaborating with Metaco, a technology firm owned by Ripple Labs Inc., to develop secure custody services, with the goal of launching the service by 2024. These services will be targeted at institutional clients and will enhance HSBC’s digital asset issuance platform, HSBC Orion.
Rising Interest in Crypto Custodial Services
The move comes as a growing number of traditional financial institutions are showing interest in providing crypto custodial services. Recently, Germany’s third-largest DZ Bank announced similar offerings, while Deutsche Bank launched comparable services in September 2023. This trend is driven by the increasing demand for custodial services from institutional players in the digital assets market.
Challenges and Opportunities
While this signifies substantial potential in the crypto custody market, it also highlights the challenges smaller firms face when trying to collaborate with large financial institutions. On the other hand, banks and asset managers have been investing millions of dollars in leveraging blockchain technology to streamline processes and reduce costs.
Hot Take: The Future of Digital Assets Custody
As more institutional players enter the digital assets market, the demand for custodial services continues to grow. With major financial institutions like HSBC embracing blockchain-based applications, opportunities are opening up for startups in the sector. This move reinforces projections that the institutional crypto custody market could potentially grow to nearly $10 trillion by 2030.
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