Notably, the partnership is HSBC’s most recent move into the realm of blockchain and tokenized assets. The new service is planned to launch in 2024, according to Bloomberg, who first reported the partnership on November 8.
In fact, the bank has recently announced a system to launch tokenized gold through its platform, HSBC Orion, for digital assets issuance. Furthermore, it is the latest large traditional financial institution to move to commercialize blockchain-based applications.
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The partnership with Ripple through Metaco sets a new important mark for both companies referring to global adoption of the offered technology.
“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, chief digital, data and innovation officer, securities services at HSBC
Metaco: Ripple’s solution to bridge banking and cryptocurrencies
Interestingly, Ripple agreed to acquire Metaco in May for $250 million, with the goal of bridging “the digital asset core system” to the banking sector and traditional finance in general. Historically, Ripple offered banks its RippleNet solution, a permissioned payment system that does not use XRP.
At this point, it is unclear whether Metaco will use the XRP Ledger for token issuance and smart contracts. However, the system will offer access to different cryptocurrencies, including the XRP token and the Web3 ecosystem.
Considering that HSBC has its own private solution for tokenized assets, it is likely that the bank will continue to use its own developed platform for this goal. Nevertheless, by offering custodial services, Ripple, through Metaco, solidifies its connections with traditional finance giants such as Hong Kong’s largest bank.