HSBC plans to offer institutional clients a custody service for digital assets such as tokenized securities, the bank's latest move in the new area of finance.
HSBC will work with Ripple Labs-owned technology firm Metaco on the safekeeping services, which it expects to go live in 2024, it said in a statement on Wednesday.
The offering will complement HSBC's platform for digital assets issuance, called HSBC Orion, and the bank's system to
HSBC is the latest large financial institution to move to commercialize blockchain-based applications, after years of testing the technology at the core of cryptocurrencies. JPMorgan Chase went
For almost a decade, banks, asset managers and market infrastructure providers have been investing millions of dollars in adapting blockchain with the aim of streamlining some of their more complex processes and reducing costs. So far the industry has yet to reap any large-scale benefits from these efforts, though the latest launches may prove to be a testing ground for the technology's utility.
Custody, in particular, has become a hotbed of activity from large players, creating opportunities for the sector's startups, while also underscoring the challenges smaller firms face in partnering with big financial companies. San Francisco-based Ripple — which agreed to acquire Metaco in May — has estimated that the crypto custody market for institutions alone could reach almost $10 trillion by 2030.
"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," Zhu Kuang Lee, chief digital, data and innovation officer, securities services at HSBC said in a statement.
Citigroup, which was building its digital-assets custody offering in partnership with Metaco, started informal talks earlier this year with other providers and was
