One of the biggest banks in the world, HSBC, revealed intentions to introduce tokenized securities as the main emphasis of a digital asset custody service for institutional clients. The programme, which the bank is collaborating on with Metaco, a Swiss leader in cryptocurrency safeguarding, is anticipated to launch in 2024. The custody solution will supplement the digital asset issuance platform of London-based HSBC Orion and its newly launched tokenized physical gold offering. When combined, these platforms will provide institutional clients with a comprehensive digital asset offering.
Tokenization is the process by which banks and other financial institutions are progressively adding a variety of real-world assets (RWA) to blockchains, which can be private ledgers or public networks like Ethereum. Regulators in Singapore, Japan, the United Kingdom, and Switzerland declared last month that they will be testing tokenization for asset management, foreign exchange, and fixed income products. Currently, tokenized securities issued on third-party platforms—such as tokenized bonds or tokenized structured products that are compatible with blockchain technology—are included in HSBC’s custody plans; however, cryptocurrencies and stablecoins are not.
Revealed in September that HSBC was collaborating with another custodial technology company, Fireblocks. HSBC’s innovation division was involved in the bank’s engagement with Fireblocks, according to a person familiar with the situation. In a statement, John O’Neill, global head of HSBC‘s digital assets strategy, markets, and securities services, said that the new digital asset custody service will be a complement to HSBC Orion, which was recently launched, as well as the tokenized physical gold. He went on to say that these offerings further demonstrate HSBC’s dedication to the all-around growth of the digital asset markets.
