HSBC Holdings PLC (LSE:HSBA) is working with Ripple Labs-owner financial technology firm Metaco to offer institutional clients of the bank custody services for digital assets and tokenised securities on the blockchain.
It follows news that FTSE 100-listed HSBC intends to tokenise the ownership of physical gold in a push to simplify gold trading through the bank’s single-dealer platform.
In a statement, HSBC’s chief digital, data and innovation officer Zhu Kuang Lee said: “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.”
Metaco will handle the custodial safekeeping services for all tokenised assets on the blockchain, with these services expected to go live at some point in 2024.
Ripple Labs acquired Switzerland-based Metaco in May this year for US$250 million, according to Crunchbase data.
HSBC has a long-standing relationship with Ripple Labs.
In 2017, the bank appointed Ripple Labs’ executive chairman Chris Larsen to its technology advisory board, established to help HSBC “capitalise on opportunities in artificial intelligence, biometrics, blockchain and data science”.
One year earlier in 2016, HSBC’s former global head of payments innovation Marcus Treacher departed the bank to join Ripple Labs as the global head of strategic accounts.
HSBC’s venture into the blockchain world follows a landmark blockchain-based transaction facilitated by JPMorgan Chase & Co (NYSE:JPM) last month, when the world’s largest bank tokenised a trade between BlackRock Inc (NYSE:BLK) and Barclays PLC (LSE:BARC) using JPMorgan’s Onyx Digital Assets rail.