HSBC, one of the world’s largest banks, has announced its intention to launch a digital asset custody service for institutional clients, with a specific focus on tokenized securities. This initiative will be conducted in collaboration with the Swiss crypto safekeeping specialist, Metaco.
Expected to go live in 2024, this custody service will complement HSBC Orion, the bank’s platform for issuing digital assets, along with a recently introduced offering for tokenized physical gold. These platforms, when combined, will provide a comprehensive digital asset solution for institutional clients, according to HSBC’s official statement.
Financial institutions are increasingly adopting tokenization, a process involving the migration of real-world assets onto blockchains, whether they be private ledgers or public networks such as Ethereum. Last month, regulators in Singapore, Japan, the U.K., and Switzerland announced their plans to test tokenization for various financial products, including fixed income, foreign exchange, and asset management.
It’s important to note that HSBC’s custody plans are presently centered on “tokenized securities issued on third-party platforms,” which include tokenized bonds and structured products compatible with both private and public blockchains. This service does not cover the custody of cryptocurrencies or stablecoins.
Metaco, acquired by Ripple for $250 million in May, is committed to delivering a robust digital asset custody platform for its financial institution clients. CEO and founder Adrien Treccani expressed excitement about their growth prospects and continued investment in personnel and technology.
John O’Neill, HSBC’s global head of digital assets strategy, markets, and securities services, highlighted that the new custody service for digital assets will complement the existing HSBC Orion platform for issuing digital assets and their recent launch of tokenized physical gold. He emphasized that these services demonstrate HSBC’s dedication to advancing digital asset markets as a whole.