Main page » Bitcoin News » HSBC taps Ripple’s Metaco to launch security token custody
Bitcoin News

HSBC taps Ripple’s Metaco to launch security token custody

HSBC taps Ripple’s Metaco to launch security token custody

HSBC, a major global banking company, is planning to launch an institutional custody platform for tokenized securities, also known as security tokens.

On November 8, HSBC announced that it has partnered with Ripple-owned tech firm Metaco to integrate its institutional platform Harmonize with HSBC’s new custody service for digital assets.

The bank is set to roll out the new digital asset custody service in 2024, complementing its digital asset issuance platform known as HSBC Orion and the HSBC offering for tokenized physical gold, which was launched on November 1, 2023. The services together form a complete digital asset offering for HSBC’s institutional clients.

According to HSBC’s global head of digital assets strategy, John O’Neill, these services underscore HSBC’s commitment to the overall development of digital asset markets.

HSBC’s head of digital, data, and innovation, Zhu Kuang Lee, stated that the bank’s plans to launch digital asset custody came in response to increasing demand from asset managers and owners for custody and fund administration of digital assets. Lee emphasized the evolving nature of this market, stating that it has never been a more important time to innovate.

A spokesperson for HSBC clarified that the upcoming digital asset custody platform for institutional investors will only cover security tokens and will not include cryptocurrencies like Bitcoin (BTC) and stablecoins like Tether (USDT). Unlike a pure cryptocurrency, a tokenized security is a digital representation of a security issued and moved on the blockchain.

HSBC has been actively seeking talent for its tokenized security division and previously stated in February 2022 that they were looking for a candidate with expertise in digital assets, particularly asset tokenization and custody.

This move into tokenized securities is not HSBC’s first foray into the blockchain and crypto industry. Earlier, on November 1, HSBC announced successful testing of tokenized deposits in collaboration with major Chinese financial services provider Ant Group.