London-based bank HSBC will be launching a digital asset custody service focused on tokenized securities for institutional clients, in collaboration with Harmonize, the institutional arm of the Swiss-based crypto custodian Metaco.
Metaco is a crypto custody firm that was acquired by the global payment company Ripple in May for $250 million. The acquisition enabled Ripple to expand its services to the Swiss financial market.
HSBC to Debut Digital Asset Custody
The digital asset custodian service will be introduced in 2024. HSBC adds that the latest service will be incorporated with HSBC Orion, the bank’s digital asset issuance subsidiary, and the recently launched offering of tokenized gold situated in its London vault.
Following its latest move, HSBC joined a consortium of global financial companies to commercialize blockchain-based applications.
With financial institutions and banks adjusting and becoming more open to blockchain technologies and cryptocurrencies, digital asset custody has become more popularized amongst institutions. The U.S.-based payments firm Ripple had previously predicted that the digital asset custody market could grow to around $10 trillion by 2030.
Kuang Lee, Chief Digital, Data, and Innovation Officer for HSBC Security Services, said in a statement:
“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.”
HSBC’s History With Cryptocurrencies
HSBC, one of the largest banks in the world, has a known history with crypto-based products and services. Last year, the bank partnered with the blockchain gaming platform The Sandbox to enter the metaverse.
However, HSBC and UK-based bank Nationwide Building Society imposed some restrictions on crypto payments earlier this year. Depending on the account type, users of the banks were limited in the amount they could spend on crypto assets via debit cards. Nationwide, on the other hand, completely banned the use of credit cards to facilitate crypto payments.
