HSBC to Offer Tokenized Securities Custody Service for Institutions

HSBC, one of the world's largest banks, said it plans to start a digital-assets custody service for institutional clients focusing on tokenized securities in conjunction with Swiss crypto safekeeping specialist Metaco.

Once live in 2024, the custody service will complement HSBC Orion, the London-based bank’s platform for issuing digital assets, as well as a recently introduced offering for tokenized physical gold, HSBC said in a statement. Together, the platforms will form a complete digital asset offering for institutional clients, the bank said.

Banks and financial institutions are bringing a range of real-world assets (RWA) onto blockchains, both private ledgers and public networks like Ethereum, in a process known as tokenization. Last month, regulators in Singapore, Japan, the U.K. and Switzerland said they will test tokenization for fixed income, foreign exchange and asset management products.

HSBC pointed out its custody plans, for now, involve “tokenized securities issued on third-party platforms, e.g., private and/ or public blockchain compatible tokenized bonds or tokenized structured products (not for custody of cryptocurrencies or stablecoins).”

In September, CoinDesk reported HSBC was working with Fireblocks, another custody technology firm. A person familiar with the matter said HSBC's work with Fireblocks involved the bank’s innovation team.

"Metaco remains focused on delivering the most robust digital asset custody platform on the market to financial institution clients," CEO and founder Adrien Treccani told CoinDesk via email. "With the strong backing of Ripple, we're excited about our growth outlook and continue to invest in people and technology."

Metaco was acquired by Ripple in May for $250 million.

The new custody service for digital assets "will complement HSBC Orion, our platform for issuing digital assets, as well as our recent launch of tokenized physical gold," John O’Neill, HSBC's global head of digital assets strategy, markets and securities services, said in the statement. “These services underscore HSBC’s commitment to the overall development of digital asset markets.”

UPDATE (Nov. 8, 11:37 UTC): Adds Metaco statement, Ripple ownership.