Global banking giant HSBC announced plans to launch an institutional-grade custody service for digital assets including tokenized securities in 2024. The service will be developed in partnership with Metaco, a crypto custody technology provider recently acquired by Ripple.
- HSBC plans to launch a digital asset custody service for institutional clients in 2024, focusing on tokenized securities. This will complement their existing offerings for issuing digital assets (HSBC Orion) and tokenized gold.
- The custody service will be developed in partnership with Metaco, a crypto custody technology firm owned by Ripple.
- Tokenization involves representing real world assets like bonds, FX, and asset management products on blockchains. Regulators in several countries are exploring tokenization.
- HSBC’s service will initially focus on custody of tokenized securities issued on third party platforms, not cryptocurrencies.
- Custody has become an active area in crypto, with major players investing and partnering with startups. Ripple estimates the institutional crypto custody market could reach $10 trillion by 2030.
The custody platform will complement HSBC’s existing digital asset offerings – HSBC Orion for issuing tokens and a system for tokenized gold trading. With these services, HSBC aims to provide a complete tokenized asset solution for institutional investors looking to explore blockchain-based capital markets.
According to HSBC, the custody service will focus on safekeeping tokenized versions of traditional securities like bonds, structured products, and other assets issued on public and private blockchains. It will not support cryptocurrency custody initially.
The move aligns with growing interest in tokenization across banking and financial institutions. Regulators in several major economies are also assessing tokenization for assets like fixed income, FX, and managed funds.
HSBC is the latest prominent institution opting to partner with crypto native companies to enable digital asset offerings. However, Citigroup is reportedly reviewing its own partnership with Metaco following the Ripple acquisition, due to potential conflicts of interest.
The institutional digital asset custody market is expected to boom in the coming years. Experts estimate it could reach $10 trillion by 2030 as blockchain adoption increases. HSBC’s timely entry into this space signals growing trust in digital asset infrastructure. The custody platform will integrate with its token issuance and trading systems to provide a robust end-to-end solution for institutional clients.