Ripple-Owned Metaco and HSBC Unveil Plans for Digital Asset Custody Service

Major global bank HSBC to add digital asset custody service to its range of enterprise-grade digital asset solutions.
The bank is partnering with Ripple-owned finance-tech firm, Metaco, to offer new service.

Global banking and financial services giant, HSBC, has announced its plans to launch a digital asset custody service for its enterprise customers who invest in tokenised securities, starting in 2024.

HSBC will partner with Ripple-owned enterprise technology company Metaco to offer the service. The news of further application of DLT in traditional financial markets was welcomed by many in the crypto community.

I think this deserves a “BOOM!”
HSBC announces tokenized securities custody with Metaco which was recently acquired by #Ripple
Remember the DTCC settles $2.4 Quadrillion worth of securities per year 👀 this is a huge untapped market for blockchain/DLT
Source -… pic.twitter.com/PxLOotpD2O
— Nick | Crypto Crusader (@NCashOfficial) November 8, 2023

Custody Platform A Response To Customer Demand

HSBC’s Chief Digital, Data and Innovation Officer, Securities Services Zhu Kuang Lee said the custody platform would provide scalable and secure infrastructure to meet growing demand from institutional customers.

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.

Zhu Kuang Lee

The announcement of the new custody service suggests the financial services giant is serious about digital assets, with the bank’s Global Head of Digital Assets Strategy, Markets and Securities Services John O’Neill saying “these services underscore HSBC’s commitment to the overall development of digital asset markets.”

HSBC’s service will leverage Metaco’s custody solution, Metaco Harmonize, and complement a number of existing digital asset offerings from the bank.

I’m excited by the forthcoming launch of our new custody service for digital assets, which will complement HSBC Orion, our platform for issuing digital assets, as well as our recent launch of tokenized physical gold.”

John O’Neill, HSBC Global Head of Digital Assets Strategy, Markets and Securities Services

Metaco is a Swiss-based company, acquired by Ripple earlier in 2023 for US $250 million (AUD $390 million) in a move that Ripple CEO Brad Garlinghouse told Reuters would help future-proof the company due to demand from institutional customers.

Garlinghouse said:

By focusing on the infrastructure … you’re not really subject to the same gyrations of the crypto winters.

Brad Garlinghouse

HSBC will leverage Metaco Harmonize, an institutional-grade digital asset custody platform.

It’s designed specifically to make it relatively easy for financial institutions—through integration with their existing systems—to meet regulatory and risk management requirements while innovating in the digital asset space.

Speaking to The Block via email, Metaco’s Founder and CEO Adrien Treccani claimed tokenisation of real world assets was becoming increasingly attractive to the traditional financial world:

Tokenisation of financial and real-world assets is gaining momentum, bringing huge potential to drive significant cost efficiencies and new revenue streams for regulated financial institutions.”