HSBC Announces Plans to Launch Custody Service for Blockchain-Based Assets Excluding Cryptocurrency
HSBC, one of the largest banks in the United Kingdom, has revealed its plans to launch a custody service for storing blockchain-based assets, excluding cryptocurrency. The announcement came on Wednesday, with the bank stating that the service will be available to institutional clients and will allow them to store blockchain-based tokens representing traditional financial assets.
In partnership with Swiss digital asset firm Metaco, HSBC aims to tap into the growing demand for custody and fund administration of digital assets from asset managers and owners. This move reflects the evolving nature of the market and the increasing interest in blockchain technology within the financial sector.
HSBC has been actively exploring the potential of blockchain technology in recent years. Last week, the bank made headlines by creating tokens representing physical gold held in its London vault. Additionally, HSBC launched its digital asset platform, HSBC Orion, in 2020. This platform enables financial institutions to issue blockchain-based versions of financial assets, also known as tokenised securities.
Zhu Kuang Lee, HSBC’s chief digital, data, and innovation officer, commented on the increasing demand for custody services for digital assets. He stated, “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.”
Blockchain technology serves as a digital ledger that records ownership of tokens. While its adoption has not yet reached mainstream levels, proponents argue that it has the potential to enhance trading efficiency and transparency in various industries.
However, it is important to note that cryptocurrency remains a relatively small part of the overall global financial system. According to CoinGecko data, the value of all cryptocurrencies stands at around $1.4 trillion, a decrease from its peak above $3 trillion in late 2021.
Despite this, HSBC’s decision to launch a custody service for blockchain-based assets excluding cryptocurrency aligns with the growing trend of banks and financial institutions exploring the potential applications of blockchain technology. These firms have invested billions of dollars into researching and finding practical uses for blockchain.
It is worth mentioning that HSBC has been active in the blockchain space for some time. In 2019, the bank introduced a platform called Digital Vault. This platform allows investors to access digital records of securities purchased on private markets.
As of now, HSBC has not disclosed the estimated size of the market for blockchain-based assets, excluding cryptocurrencies. However, this move indicates the bank’s commitment to staying at the forefront of digital innovation within the financial industry.
HSBC’s announcement comes amidst a broader trend of financial institutions exploring and embracing blockchain technology. With its potential to revolutionize various sectors, including finance, healthcare, and supply chain management, blockchain is increasingly being recognized as a transformative force in the digital age.
More detail via Investing.com UK here… ( Image via Investing.com UK )