- HSBC is planning to launch custody services for digital assets to institutional clients.
- The banking giant is partnering with the Ripple-owned DeFi firm Metaco.
- HSBC’s new services will complement the company’s digital asset issuance platform, HSBC Orion.
On November 8, Bloomberg reported that HSBC Holdings Plc intends to provide custody services for digital assets like tokenized securities to its institutional clients, in collaboration with Metaco, a Swiss-based institutional digital asset custody, trading and DeFi firm owned by Ripple Labs.
According to Reuters, the bank stated that these services will become operational in 2024. In a statement, Zhu Kuang Lee, HSBC’s Chief Digital, Data, and Innovation Officer said,
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.
This offering will serve as a complement to HSBC’s digital asset issuance platform, known as HSBC Orion, and the bank’s system for tokenized gold issuance, which was introduced just last week. The latter utilizes distributed ledger technology to symbolize ownership of physical gold stored in its London vault through digital tokens.
Meanwhile, on November 2, HSBC carried out successful trials involving tokenized deposits, resulting in enhanced efficiency in treasury fund transfers. This was carried out in a sandbox environment facilitated by the Hong Kong Monetary Authority, in collaboration with Ant Group, a prominent Chinese financial services company co-founded by Jack Ma.
Major financial institutions including JPMorgan, Deutsche Bank, and now HSBC have recently implemented blockchain applications for commercial purposes. On October 26, Takis Georgakopoulos, global head of payments at JPMorgan, unveiled that its JPM Coin payment system is currently processing a daily transaction volume of $1 billion.
Similarly, in September, Deutsche Bank announced a partnership with the Swiss digital asset technology provider Taurus to create digital asset custody and tokenization services for its clientele.
However, prominent U.S.-based banking firm Citigroup, which is already in collaboration with Metaco, is reportedly engaged in informal discussions with alternative service providers. Bloomberg further speculated whether Citigroup’s reconsideration is due to Ripple’s acquisition of Metaco for $250 million.
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