HSBC Enters Digital Assets Custody Race

HSBC has unveiled plans to launch a new digital assets custody service in 2024, as a complement to its existing platform for issuing digital assets, HSBC Orion.

The bank is working with Swiss enterprise tech firm, Metaco, to use its institutional platform, Harmonize, as part of HSBC’s new custody service, which is aimed squarely as institutional clients who invest in tokenised securities.

“We’re seeing increasing demand for custody and fund administration of digital assets from asset managers and asset owners, as this market continues to evolve,” says Zhu Kuang Lee, chief digital, data and innovation officer, Securities Services, HSBC. “Through key partnerships, HSBC is delivering the next-generation custody infrastructure that will be scalable and secure. For asset servicers, there has never been a more important time to innovate, to collaborate and to create change.”

Metaco was acquired earlier this year by Ripple and counts Citi, Société Générale and BNP Paribas among its banking clients as traditional custodians move into a space previously dominated by start-up and crypto-native firms. Both BNY Mellon and State Street have unveiled digital asset custody solutions, as has Deutsche Bank, while Nomura and Standard Chartered have established subsidiary businesses to tap into the market.

“Custody infrastructure such as Metaco’s Harmonize, which integrates with financial institutions’ existing systems, will be critical to how issuers and investors interact, as capital markets and assets in general continue to be represented on distributed ledgers,” observes Adrien Treccani, CEO and founder of Metaco.