HSBC, a major global banking company, has announced its plans to launch an institutional custody platform for tokenized securities, also known as security tokens. This move comes as part of HSBC’s continued efforts to expand its digital asset offerings for institutional clients.
The banking company has partnered with Ripple-owned tech firm Metaco to integrate its institutional platform, Harmonize, with HSBC’s new custody service for digital assets. The new digital asset custody service is expected to be rolled out in 2024 and will complement HSBC’s existing digital asset issuance platform, HSBC Orion, as well as its offering for tokenized physical gold, which was launched on Nov. 1, 2023.
According to HSBC’s global head of digital assets strategy, John O’Neill, these services underscore HSBC’s commitment to the overall development of digital asset markets. The decision to launch a digital asset custody service is a response to the increasing demand from asset managers and asset owners, as stated by HSBC’s head of digital, data, and innovation, Zhu Kuang Lee. Lee emphasized that the market for custody and fund administration of digital assets continues to evolve, and it has never been a more important time to innovate.
A spokesperson for HSBC clarified that the upcoming digital asset custody platform for institutional investors will specifically cover security tokens and will not include cryptocurrencies like Bitcoin (BTC) and stablecoins like Tether (USDT). Unlike a pure cryptocurrency, a tokenized security is a digital representation of a security issued and moved on the blockchain.
HSBC has been actively seeking talent for its tokenized security division and previously announced its search for a candidate with expertise in digital assets, particularly asset tokenization and custody. This move demonstrates HSBC’s commitment to strengthening its position in the blockchain and crypto industry.
In addition to its plans for the digital asset custody platform, HSBC recently announced successful testing of tokenized deposits in collaboration with major Chinese financial services provider Ant Group. This indicates that HSBC is continuing to explore and expand its presence in the digital asset space.
Overall, HSBC’s decision to launch an institutional custody platform for tokenized securities represents a significant expansion of its digital asset offerings for institutional clients. The move is driven by the increasing demand for custody and fund administration of digital assets, and it underscores HSBC’s commitment to the overall development of digital asset markets. With the launch of the new digital asset custody service in 2024, HSBC aims to offer a complete digital asset solution for its institutional clients, further solidifying its position in the digital asset space.
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