The London-based banking institution HSBC has entered into a partnership agreement with Metaco to introduce custodial services to institutional clients. The two partners plan to offer a wide range of tokenized securities that blend with the ever-changing needs of institutional clients.
Under the partnership agreement, HBSC and Metaco will introduce custodial services for institutional clients interested in tokenized securities. The official publication demonstrated that the new product will be available in the market in early next year.
HSBC Partners with Metaco
Lately, the dynamism of the financial landscape challenged most banking institutions to invest in tokenizing real-world world-assets (RWA). Tokenization involves introducing the RWA into the blockchain technology to create digital assets.
Occasionally tokenization has been used to create digital versions of bonds, stocks, exchange-traded funds (ETFs), and real estate. Based on the endless opportunities offered by the tokenization of assets, critical financial watchdogs in Spain, Switzerland, the UK and Japan have revealed plans to experiment the tokenization concept on foreign exchange, fixed income, and asset management portfolios.
However, as tokenization set a stage in the financial sector HSBC and Metaco intend to supplement the custodial services offering with the existing digital assets. This development aims at strengthening the proposed custodial services to meet the market demand.
Demand for Custodial Services Among Institutional Clients
Firstly the bank plans to leverage HBSC Orion’s digital assets product offering to support in bringing the new service to the market. Also with the demand for tokenized assets HSBC will use its gold tokenized solution to support the offering of the new custodial services.
In the latter, the bank anticipates that by combining the digital assets offering with the gold tokenized solution the proposed custodial services will match with the needs of the institutional clients.
An announcement conveyed by the HSBC head of data and innovation Zhu Kuang Lee revealed that the demand for custodial service has gradually increased among institutional clients.
The executive stated that HBSC seeks to bridge the existing gaps in the financial ecosystem to offer asset owners and managers solutions in fund administration and custody services.
In support of this, the chief executive of Metaco Adrien Treccani was pleased to partner with the world’s largest financial institution HSBC.
The executive anticipates that through the partnership HSBC and Metaco will conduct extensive research on suitable decentralized ledger technology (DLT) that can be used in asset creation and build a solid custodial platform.
HSBC and Metaco to Offer Custodial Services
With the convergence in traditional finance to decentralized finance (DeFi) the CEO noted that capital markets and other assets are transitioning to the DLT. The exciting development in the financial sector inspired the Swiss-based enterprise company to launch Metaco Harmonize in 2021 to integrate custodial platforms with the existing financial systems.
Elsewhere HSBC head of digital assets strategy and markets John O’Neill stated that the new custodial service seeks to supplement the HSBC Orion product offering and the tokenized gold. The executive admitted that the collaboration with Metaco demonstrates HSBC’s commitment to expanding its digital assets offerings.
In his address, O’Neill confessed that the tokenized securities offering was not a new concept for HSBC. A couple of days ago HSBC partnered with Ant Group to conduct tokenized deposit trials.
HSBC Pledges to Invest in Expanding Tokenizing Securities
After the completion of the tokenized deposit, HSBC vowed to optimize its tokenization efforts. The bank believes that after attaining its primary objective of tokenization the HSBC team will share in-depth insights about tokenization of assets with other financial institutions.
Last month HSBC joined forces with the New York-based crypto custodial platform Fireblocks. At that time the HBSC shared the proposed custody plan which will mainly focus on tokenized securities offered by third-party platforms.
On the other hand, Metaco has been profiled as a renowned crypto safekeeping expert after it was acquired by Ripple.
In May Ripple closed a mergers and acquisition deal with Metaco at $250 million. The acquisition aimed at supporting Metaco to expand its custodial services offering.