HSBC Teams Up with Ripple-Owned Metaco for Digital Asset Custody Services
HSBC plans to offer custody services for digital assets in partnership with Ripple Labs-owned Metaco, set to launch in 2024.
British banking and financial services group HSBC, plans to offer custody services for digital assets, like tokenized securities, in partnership with Ripple Labs-owned Metaco, set to launch in 2024.
“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 chief digital, data and innovation officer for securities services, Zhu Kuang Lee said.
Custody services have become a focal point of activity in the blockchain industry. With HSBC joining the ranks of major players, the landscape is evolving rapidly, creating both opportunities for startups and challenges for smaller firms looking to partner with established financial entities.
Despite the buzz surrounding blockchain technology in the banking sector for almost a decade, the industry is yet to witness substantial benefits from these endeavors. However, with HSBC’s latest announcement and similar initiatives by other major players, the industry seems poised to enter a new phase where practical applications and large-scale benefits may become more tangible.
Citigroup Reviewing Partnership with Metaco
Considering HSBC’s move, Citigroup is reportedly reviewing its partnership with Metaco. This review comes after Ripple’s acquisition of Metaco in May, raising concerns about potential conflicts of interest.
Industry insiders speculate that this move by Citigroup underscores the intricate challenges faced by financial institutions navigating partnerships in the rapidly evolving digital asset and blockchain space.
Citi stands as a prized client for various compelling reasons. Currently, it holds the position of the world’s fourth-largest custodian bank, trailing behind BNY Mellon, State Street and JP Morgan. Notably, Citi has taken the lead in launching the Regulated Liability Network – an initiative that aims to establish a connection between central bank digital currencies, bank deposit tokens, and other tokenized digital assets.
A recent proof of concept, involving collaboration with the New York Federal Reserve and several other banks, has just concluded, marking a significant milestone in the project’s development.
The collaboration with Metaco and the ensuing ripple effect on partnerships within the sector underlines the dynamic nature of the blockchain and digital asset landscape.
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