HSBC, recognized globally as a banking heavyweight, is taking a significant step into the future of digital assets. The bank is poised to introduce a pioneering custody service specifically designed for tokenized real-world assets like securities. This initiative is targeted at institutional clients. In a strategic move, HSBC is joining forces with Metaco, a tech company under Ripple Labs‘ umbrella, to roll out this custody service, Bloomberg reports.
The launch is planned for 2024 and promises to be a noteworthy addition to HSBC‘s suite of digital asset services. This service will integrate seamlessly with HSBC Orion, the bank’s platform for digital assets issuance, and its recently launched system for issuing tokenized gold, securely housed in its London vault.
This development places HSBC among the ranks of major financial institutions that have embraced blockchain technology after years of exploration and experimentation. This trend is mirrored in the activities of other leading financial players like JPMorgan, which leverages its proprietary blockchain for collateral settlements, and Euroclear noted for its blockchain-powered platform for issuing traditional securities.
HSBC‘s foray into custody services is currently focused on “tokenized securities issued on third-party platforms.” This includes a range of assets compatible with private and public blockchains, such as tokenized bonds. However, the bank’s custody services, at this stage, do not extend to stablecoins or cryptocurrencies.
The move by HSBC underscores a growing recognition among traditional financial institutions of the potential and importance of blockchain technology and digital assets. By providing a secure and reliable custody solution for tokenized assets, HSBC is positioning itself at the forefront of this technological evolution, offering its institutional clients a bridge between the established world of traditional finance and the emerging realm of digital assets.
