HSBC Ventures into Digital Assets Custody with Metaco Partnership

In a new foray into the financial frontier, HSBC Holdings Plc plans to launch a custody service for digital assets, particularly tokenized securities. Teaming up with Metaco, a technology firm owned by Ripple Labs Inc., the service is expected to be operational in 2024.

The offering supports HSBC's recently revealed tokenized gold issuance system and its digital asset platform, HSBC Orion, utilizing distributed ledger technology to represent ownership of actual gold stored in its London vault.

As major financial institutions like JPMorgan Chase & Co. and Euroclear make strides in commercializing blockchain-based products, HSBC's move underscores the industry's exploration of blockchain's potential applications.

Custody, a focal point for major players, reflects the challenges faced by smaller businesses collaborating with larger financial institutions. The market for cryptocurrency custody for institutions, estimated by Ripple to reach $10 trillion by 2030, positions HSBC strategically in response to increasing demand from asset managers and owners.