HSBC Holdings Plc is set to unveil a new service for digital asset custody targeted at its institutional clientele. This initiative, slated for a 2024 launch, is a collaboration with Metaco, a Ripple-affiliated firm, to fulfill storage requirements.
Digital Asset Custody Service
In a strategic move to bolster its digital offerings, HSBC will roll out its digital asset custody service to meet the growing demand from asset managers and owners. This service is a natural extension of its existing HSBC Orion platform, which specializes in issuing tokenized gold backed by physical assets in HSBC’s London vault.
Leveraging Blockchain Technology
HSBC joins the wave of financial institutions embracing blockchain technology for commercial applications. This announcement comes shortly after JPMorgan’s groundbreaking collateral settlement using blockchain technology, highlighting the financial sector’s increasing openness to blockchain and cryptocurrencies.
The digital asset custody market is on a trajectory for expansion, with Ripple projecting its growth to reach $10 trillion by 2030. Zhu Kuang Lee, HSBC’s chief officer for digital, data, and innovation services, noted the surge in demand for digital asset management solutions as a key factor driving the development of these services.
HSBC’s latest move reflects a wider trend among financial institutions recognizing the potential of digital and tokenized assets. With client demand on the rise, these institutions are increasingly providing avenues for investment in cryptocurrencies and other digital assets.
In addition to HSBC, Metaco had been poised to partner with Citigroup Inc. for similar digital asset services. Although Citigroup has engaged in preliminary discussions with alternative providers, the interest from such major financial entities underscores the significant momentum behind digital asset services.
