One of the biggest banks in the world, HSBC, said that it will launch a digital asset custody service for institutional customers that would concentrate on tokenized securities in partnership with Metaco, a Swiss cryptocurrency safeguarding expert.The custody service will support HSBC Orion, the London-based bank’s digital asset issuance platform, and its recently launched tokenized physical gold offering, once it goes live in 2024, according to a statement from HSBC.The bank stated that the platforms taken as a whole will provide institutional clients with a comprehensive digital asset offering.
Tokenization is the process by which banks and other financial institutions are adding a variety of real world assets (RWA) to blockchains, both private and public networks like Ethereum.Regulators in Singapore, Japan, the United Kingdom, and Switzerland announced last month that they will test tokenization for asset management, foreign exchange, and fixed income 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).”
It was revealed in September that HSBC was collaborating with another custody technology company, Fireblocks.According to someone with knowledge of the situation, HSBC’s innovation team was involved in the bank’s collaboration with Fireblocks.
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.”