Metaco and HSBC Partnership Targets $10 Trillion Crypto Custody Market

• Ripple acquires Metaco and allies with HSBC, positioning itself as a leader in cryptocurrency custody valued at $10 billion.
• Ripple’s strategy includes secure custody, tokenization and payments, aiming to be a single point of service.

During an interview on the Thinking Crypto Podcast, Ripple CTO David Schwartz broke down the details of this foray, marked by the acquisition of Metaco and the alliance with banking giant HSBC.

Ripple CTO David Schwartz has revealed details about Ripple’s strategic entry into the $10 billion cryptocurrency custody market.

#Ripple bought #Metaco to conquer multiple trillion-dollar markets:

1⃣ #Tokenization
2⃣ Integration with Payments and Liquidity
3⃣ Digital Custody for tokenized assets like #Gold
4⃣ Digital asset insurance
5⃣ Tokenized Securities

Trillion-dollar bank #HSBC will handle the KYC… pic.twitter.com/hSnOOYeBU8

— Marcel Knobloch aka Collin Brown (@CollinBrownXRP) January 25, 2024

Ripple’s decision to venture into custody is in response to its ambition to become a “single point of service” for institutional adoption of cryptocurrencies. Schwartz stressed that it is not enough to just offer access to the XRP Ledger; it is also essential to provide an end-to-end solution that encompasses tokenization, payments and, crucially, secure custody.

Institutions, which are showing increasing interest in the crypto space, will initially look for providers that offer a full spectrum of services, including custody, liquidity and payment solutions. “By adding custody, we are going to make Ripple the premier provider of enterprise solutions in the space,” Schwartz stated.

Ripple’s choice to acquire Metaco, made in May 2023 for a quarter of a billion dollars, was no accident. The purchase represents Ripple’s largest acquisition to date, a clear sign of its commitment to this new strategic direction.

Schwartz highlights the magnitude of the custody market, projected to reach $10 trillion by 2030. With the rise in tokenization, the demand for secure and reliable custody solutions will only continue to grow. In this context, secure storage, whether of central bank digital currencies (CBDCs) or stablecoins, becomes an indispensable requirement.

The collaboration with HSBC is no less significant

HSBC is preparing to launch a bespoke digital asset custody service for its clients, leveraging advanced technology for custody and taking responsibility for compliance on behalf of its clients.

This layered approach demonstrates HSBC’s commitment to security and compliance, and its choice to collaborate with Ripple underscores the strength and reliability of the solutions Ripple is positioned to offer.

Overall, Ripple’s strategy signals a significant move towards institutional adoption of cryptocurrencies, highlighting custody as a critical component in this landscape. With its recent acquisition of Metaco and alliance with HSBC, Ripple is not only adapting to the future of digital finance but is actively shaping it, securing its position as a leader in the cryptographic custody market and redefining the role of cryptocurrencies in the global financial sector.

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