HSBC has teamed up with Metaco, a subsidiary of Ripple specialising in tokenised assets, to introduce a secure custodial service tailored for institutional clients.
This collaboration represents a significant step towards bridging traditional banking and the rapidly evolving world of digital assets.
HSBC is set to make its mark in the blockchain and tokenised asset arena with the planned launch of this new service in 2024.
The bank has also unveiled its intentions to issue tokenised gold through HSBC Orion, its dedicated platform for digital asset issuance.
By embracing blockchain-based applications, HSBC is joining the ranks of traditional financial institutions exploring innovative avenues for commercial use.
The increasing demand for custody and fund administration of digital assets is emphasised by Zhu Kuang Lee, HSBC’s Chief Digital, Data, and Innovation Officer for Securities Services. Asset managers and owners are flocking to this evolving market, making secure custodial services more crucial than ever.
While it’s uncertain if Metaco will employ the XRP Ledger for token issuance and smart contracts, their system provides access to various cryptocurrencies, including the XRP token, and integration with the Web3 ecosystem.
As HSBC already has a well-established infrastructure for tokenised assets, it’s probable that they will continue using their proprietary platform.
Nevertheless, through Metaco, Ripple is reinforcing its connections with key players in traditional finance, including the eminent HSBC.
It’s important to note that HSBC’s entry into blockchain and tokenised assets won’t immediately alter its traditional banking system. Some in the industry remain skeptical about whether the XRP Ledger or the broader Web3 ecosystem is the ideal choice for token issuance and smart contracts. The introduction of tokenised gold and other assets into the financial sector raises regulatory and auditing questions, highlighting the need for a comprehensive approach to oversight.