Ripple Partners With HSBC For 2024 Launch Of Tokenized Securities Custody Service

Ripple Labs, the blockchain firm that recently secured a significant legal victory against the U.S. Securities and Exchange Commission (SEC), is collaborating with HSBC on a new project to launch a custodial service for institutional clients, set to be rolled out next year.

HSBC, one of the world's largest banking and financial services organizations, is firmly positioning itself in the future of finance as it prepares to introduce a new service in partnership with Metaco, a Ripple Labs-owned trading and decentralized finance (DeFi) firm.

In 2024, the partnership plans to launch a custody service for digital assets and tokenized securities for institutional clients, signaling a move toward the new era of finance.

"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," HSBC's Chief Digital, Data and Innovation Officer of Securities Services, Zhu Kuang Lee, said in a statement.

"Through key partnerships, HSBC is delivering the next-generation custody infrastructure that will be scalable and secure," the executive added.

"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," said John O'Neill, HSBC's Global Head of Digital Assets Strategy, Markets and Securities Services. He added, ''These services underscore HSBC's commitment to the overall development of digital asset markets."

The latest development puts HSBC on the list of major banks like Deutsche Bank and JPMorgan, which, over the past months, have commercialized blockchain applications.

It also coincides with the bank's recent initiative called HSBC Orion, which is a platform for digital asset issuance. Additionally, the bank utilizes distributed ledger technology to represent ownership of physical gold held in its London vault via digital tokens.

However, HSBC clarified through its spokesperson that the upcoming digital custody platform is intended for institutional investors and will only support security tokens, not cryptocurrencies such as Bitcoin or stablecoins like Tether.

"Tokenization 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," Adrien Treccani, Metaco founder and CEO, said.

Ripple Labs is currently holding its flagship two-day event called Ripple Swell at Madinat Jumeirah Conference Centre, Dubai, which is set to end Thursday.

The XRP community speculates that Ripple might make an important announcement at the event, with the announcement going public through an Initial Public Offering (IPO), which is highly anticipated.