HSBC Announces Plans to Offer Digital Assets Custody Services for Institutions

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HSBC, the London-based financial institution, announced its plans to launch an institution-focused digital assets custody service in 2024. Zhu Kuang Lee, chief digital, data and innovation officer at HSBC, explained that the bank had experienced an increasing demand for these services from asset managers and asset owners.

HSBC Announces Digital Assets Custody Service

HSBC, a financial institution with a presence in more than 60 countries and over $3 trillion in assets, has announced that it plans to launch a service to offer custody of digital assets for institutional customers. The service, which will go live in 2024, will come to complement the digital services offering of the bank, which expects to offer a comprehensive asset management suite for its customers worldwide.

The launch of this platform comes at the request of HSBC’s customers, who have been demanding these services. Zhu Kuang Lee, chief digital, data and innovation officer at HSBC, stated:

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.

Recently, the bank entered the gold tokenization markets, announcing the launch of a tool for customers to have more control over the status of their holdings, allowing them to trade their tokenized gold on HSBC’s platforms in the Greater London area. Also, HSBC announced Orion in 2022, a service for issuing tokenized assets.

Metaco’s Involvement

To develop this new platform, HSBC enlisted the help of Metaco, a Swiss-based company founded in 2015 that provides core services to manage digital assets. The bank will use Harmonize, a comprehensive suite that provides custody, tokenization, trading, and asset management services for regulated and non-regulated digital assets. BNP Paribas, Societe Generale, and Citi have also partnered with Metaco to use Harmonize in their operations.

Adrien Treccani, founder and CEO of Metaco, explained:

Custody infrastructure such as Metaco’s Harmonize, which integrates with financial institutions’ existing systems, will be critical to how issuers and investors interact, as capital markets and assets in general continue to be represented on distributed ledgers.

Metaco is owned by cryptocurrency and payments platform Ripple, which acquired it in March for $250 million to target the institutional custody market. At the time, Ripple’s president Monica Long declared she expected this industry to reach $10 trillion by 2030.

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