HSBC Reveals Plans for Non-Crypto Digital Asset Custody by 2024

Discover HSBC's plans for non-crypto digital asset custody by 2024. The British bank aims to leverage Ripple's Metaco technology to store bonds and other securities, complementing its Orion platform for digital asset issuance. Stay informed about the latest developments in asset custody services.

HSBC, one of the largest banks in the world, has revealed plans to introduce a custody service for blockchain-based tokens representing traditional financial assets. However, it is important to note that the bank's custody service will not include any cryptocurrencies or stablecoins. The announcement, made on Wednesday, highlighted HSBC's intention to collaborate with Swiss digital asset firm, Metaco, which was recently acquired by Ripple, a leading blockchain technology company.

By leveraging Metaco's advanced technology, HSBC aims to offer a secure and trustworthy storage solution for bonds and other securities. This strategic move is designed to complement the bank's existing Orion platform, which facilitates the issuance of digital assets. Additionally, HSBC recently launched an offering that allows for the tokenization of gold.

As for the market potential of blockchain-based assets, excluding cryptocurrencies, HSBC has not provided an estimate. However, Ripple, referencing data from Bloomberg, has projected that the cryptocurrency custody market for institutional investors alone could reach a staggering $10 trillion by 2030. Currently, CoinGecko data reveals that the total value of all cryptocurrencies stands at approximately $1.4 trillion, only a fraction of its peak value in late 2021.

Among major U.S. banks comparable in size to HSBC, BNY Mellon has played a prominent role in championing digital asset custody. The financial institution has developed a comprehensive multi-asset platform, enabling the secure storage, transfer, and issuance of various cryptocurrencies on behalf of its asset management clients. Following BNY Mellon's lead, Citi and State Street have also established dedicated digital asset units, underscoring the growing importance of this emerging sector.

In conclusion, HSBC's forthcoming custody service for blockchain-based tokens represents a significant step towards bridging the gap between traditional financial assets and digital innovation. By collaborating with Metaco and leveraging its technology, HSBC aims to provide a robust and secure storage solution for bonds and securities. As the market for blockchain-based assets continues to expand, it will be interesting to observe the growth and future developments of HSBC's digital asset offerings.