HSBC Partners with Ripple-Backed Firm to Offer Crypto Custody Services

HASB building

HSBC, the largest bank in Hong Kong and one of the world’s leading financial institutions, has announced a partnership with PolySign, a company owned by Ripple Labs Inc., to provide custody services for digital assets, including cryptocurrencies and tokenized assets. The partnership is expected to go live in 2024, following regulatory approvals and technical integration.

PolySign is a blockchain-based platform that enables institutions to securely store and manage their digital assets, such as Bitcoin, Ethereum, XRP, and stablecoins. PolySign also supports the issuance and transfer of tokenized assets, such as securities, commodities, and real estate. PolySign is backed by Ripple, the company behind the XRP cryptocurrency and the RippleNet payment network.

A strategy to embrace the digital transformation

HSBC’s chief digital officer, David Lewis, said that the partnership with PolySign is part of the bank’s strategy to embrace the digital transformation of the financial industry and to meet the growing demand from its clients for exposure to digital assets.

“We believe that digital assets have the potential to create new opportunities for our clients and our business. By partnering with PolySign, we will be able to offer our clients a secure and compliant way to custody and manage their digital assets, as well as access to innovative products and services based on blockchain technology,” he said.

More intitiatives in the crypto space using Orion

The partnership with PolySign is not the only initiative that HSBC is pursuing in the digital asset space. HSBC Orion, the bank’s digital asset issuance platform, has recently launched a tokenized gold issuance system, using digital tokens to represent ownership of the physical gold held in its London vaults. The system allows clients to buy and sell gold tokens, as well as redeem them for physical gold, using HSBC’s app or website. HSBC Orion also plans to issue other types of tokenized assets, such as bonds, equities, and funds, in the future.

A drive towards compliance

HSBC’s move to offer crypto custody services and tokenized assets comes at a time when the global regulatory landscape for digital assets is evolving rapidly. While some jurisdictions, such as Singapore, Switzerland, and the UK, have adopted a more supportive and clear stance on digital assets, others, such as China, India, and the US, have imposed stricter rules and restrictions on the sector.

HSBC said that it will comply with all relevant regulations and standards in the markets where it operates, and that it will work closely with regulators and industry bodies to promote the development of a safe and sustainable digital asset ecosystem.

Author: Bamisile Oluseun