Today HSBC confirmed its intention to launch a digital asset custody solution in 2024. We reported last month that it was hiring staff. HSBC’s offering will target institutional clients investing in tokenized securities, but not cryptocurrency.
The bank is partnering with Swiss custody technology firm Metaco and will use its Harmonize custody and orchestration solution.
HSBC, one of the world’s largest custodians, holding $9.1 trillion in custody at the end of 2022. It sees the custody offering as complementing its other digital assets solutions. This includes HSBC Orion for bond tokenization and issuance and the recently announced gold tokenization solution.
“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,” said Zhu Kuang Lee, Chief Digital, Data and Innovation Officer, Securities Services, HSBC. “Through key partnerships, HSBC is delivering the next-generation custody infrastructure that will be scalable and secure. For asset servicers, there has never been a more important time to innovate, to collaborate and to create change.”
Following Metaco’s acquisition by Ripple in May, this is the first major new client announcement. Metaco’s other banking clients include BBVA, BNP Paribas Securities Services, Citi, DBS, SocGen Forge, Standard Chartered’s Zodia Custody as well as German banks DekaBank and DZ Bank.
With this win, Metaco services numbers two (HSBC), three (Citi) and four (BNPP) on the list of global systemically important banks.
Meanwhile, in addition to digital assets, HSBC is also embracing tokenized deposits. It participated in Regulated Liability Network trials in New York and London. Additionally, it ran two tokenized deposit trials with Ant and Visa in Hong Kong.