HSBC, a leading global banking institution, has joined forces with Metaco, a tech firm under Ripple’s ownership. This is in a strategic move towards expanding its digital asset services. The partnership aims to enable institutional investors to securely hold tokenized securities through HSBC’s upcoming custody platform.

Integration of Institutional Platform Harmonize with HSBC’s Custody Service

Announced on November 8, HSBC revealed plans to integrate Metaco’s institutional platform, Harmonize, with its forthcoming custody service for digital assets. The collaboration is part of HSBC’s broader commitment to developing digital asset markets. John O’Neill, HSBC’s Global Head of Digital Assets Strategy, emphasized the significance of these services in advancing the digital asset landscape.

Anticipated to launch in 2024, HSBC’s new digital asset custody service will complement its existing digital asset issuance platform, HSBC Orion. This move follows the recent introduction of HSBC’s offering for tokenized physical gold on November 1, 2023. Together, these services form a comprehensive digital asset offering tailored to meet the needs of HSBC’s institutional clients.

Zhu Kuang Lee, HSBC’s Head of Digital, Data, and Innovation, highlighted the increasing demand for custody and fund administration of digital assets from asset managers and owners. Lee emphasized the evolving nature of this market, stating that it’s a pivotal time for asset servicers to innovate.

HSBC to integrate Metaco's institutional platform, Harmonize, with its forthcoming custody service for digital assets.

Focus on Tokenized Securities

It’s crucial to note that HSBC’s upcoming digital asset custody platform exclusively caters to security tokens. The scope does not extend to cryptocurrencies like Bitcoin (BTC) or stablecoins such as Tether (USDT). Unlike pure cryptocurrencies, tokenized securities represent a digital form of securities issued and transferred on the blockchain.

HSBC’s venture into tokenized securities aligns with its ongoing efforts to strengthen its talent pool in this domain. The institution had been actively seeking candidates with expertise in digital assets, specifically in asset tokenization and custody, since February 2022.

HSBC’s Prior Engagements in Blockchain and Crypto

This move into tokenized securities is not HSBC’s initial foray into the blockchain and crypto industry. On November 1, the bank announced the successful testing of tokenized deposits in collaboration with major Chinese financial services provider Ant Group. HSBC continues to position itself as a key player in the evolving landscape of digital finance.

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