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- HSBC has announced the launch of a new digital asset custody service for its institutional clients interested in tokenized securities as it ramps up crypto offerings.
- The European banking giant has tapped Metaco, a Ripple-owned tech firm, for the offering and will be integrating the firm’s Harmonize digital asset platform.
European banking conglomerate HSBC has announced the launch of an institutional-grade digital asset custody service as it seeks to expand its crypto products.
Today was the biggest news drop in the history of #crypto adoption…#HSBC #XRP
"When the floodgates open, all hell breaks loose…" https://t.co/sqM8gbnfJx pic.twitter.com/WMriF44fdK
— Chad Steingraber (@ChadSteingraber) November 8, 2023
The new platform will go live next year and will complement HSBC Orion, the bank’s digital asset issuance platform. The bank also recently launched a platform for tokenizing the physical gold held in its London vault. It leverages blockchain technology, allowing easy and efficient trading of digital tokens representing gold bars.
“Together, these form a complete digital asset offering for HSBC’s institutional clients,” the bank says.
HSBC has tapped Metaco for the custody project. Ripple owns Metaco, which provides technology that allows companies in crypto and beyond to build digital asset operations. Its primary offering is Harmonize, a platform that enables custody, trading, tokenization, staking, smart contract management and much more. The partnership has the XRP community excited at the possibilities from the partnership in yet another landmark move by Ripple.
HSBC’s Zhu Khuang Lee revealed that the latest crypto offerings are the bank’s response to its clients’ demands. Lee, who is the chief digital, data and innovation officer at the bank, commented:
We’re seeing increasing demand for custody and fund administration of digital assets from asset managers and asset owners, as this market continues to evolve.
Through key partnerships, HSBC is delivering the next-generation custody infrastructure that will be scalable and secure. For asset servicers, there has never been a more important time to innovate, to collaborate and to create change.
His colleague John O’Neill reiterated the bank’s excitement with the launch of the new product. O’Neill who heads the digital asset division, says the offerings “underscore HSBC’s commitment to the overall development of digital asset markets.”
Before you get excited, HSBC won’t offer custody for BTC, Ether, XRP or any of your favorite cryptocurrencies. A spokesperson told one crypto news outlet that it will only custody security tokens.
Tokenizations Soars
HSBC—Europe’s largest bank—is the latest multinational banking giant supporting tokenization. JPMorgan Chase, America’s largest bank, launched its blockchain-based settlement platform last month. Euroclear, the world’s largest securities settlement platform, recently launched a tokenized securities platform.
Tokenization strikes the right balance between innovation and compliance for global banking giants. Crypto, NFTs and Web3 have proven too steep a jump for companies stuck in their ways for centuries. However, tokenized securities allow the banks to keep their stranglehold on the financial world while improving efficiency and cutting costs. Regulators are also lax with tokenization, unlike crypto.
Several reports have predicted that trillions of dollars will be tokenized on the blockchain by the decade’s end. One report projects a jump from the $3 billion worth of tokenized assets today to $16 trillion by 2030.
