HSBC, one of the world’s leading global banking companies, has unveiled its ambitious plan to...
HSBC, one of the world’s leading global banking companies, has unveiled its ambitious plan to introduce an institutional custody platform designed for tokenized securities, often referred to as security tokens.
In collaboration with Metaco, a technology firm owned by Ripple, HSBC is set to integrate its institutional platform, Harmonize, with a groundbreaking custody service tailored for digital assets.
This strategic partnership was officially announced on November 8, signaling HSBC’s firm commitment to the burgeoning world of digital finance.
The anticipated launch date for this innovative digital asset custody service is slated for 2024, marking a significant milestone for the banking giant.
It will complement HSBC’s pre-existing digital asset issuance platform, known as HSBC Orion, and its offering for tokenized physical gold, which made its debut on November 1, 2023. Collectively, these services will constitute a comprehensive digital asset solution for HSBC’s institutional clients, further solidifying the bank’s position in the evolving digital asset markets.
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John O’Neill, HSBC’s Global Head of Digital Assets Strategy, emphasized the significance of these new offerings, stating that they underscore HSBC’s dedication to advancing digital asset markets.
The decision to venture into digital asset custody was prompted by the escalating demand from asset managers and asset owners for secure custody and fund administration services for their digital assets. Zhu Kuang Lee, HSBC’s Head of Digital, Data, and Innovation, highlighted the evolving nature of this market, stressing that asset servicers have never faced a more critical moment to innovate.
Notably, HSBC clarified that its forthcoming digital asset custody platform for institutional investors will exclusively cover security tokens and will not encompass cryptocurrencies like Bitcoin or stablecoins such as Tether.
In contrast to pure cryptocurrencies, tokenized securities represent digital versions of securities issued and transacted on blockchain networks.
HSBC’s foray into the realm of tokenized securities aligns with its broader engagement with blockchain and the cryptocurrency industry. On November 1, the bank announced the successful testing of tokenized deposits in collaboration with Ant Group, a major Chinese financial services provider.
This move demonstrates HSBC’s commitment to staying at the forefront of financial innovation and technology within the global banking landscape.