Ripple Launches Crypto Custody for Banks and Fintech Firms

Highlights:

• Ripple launched a new custody service for banks and fintech firms.
• The project features integration with the XRP ledger and AML monitoring.
• Ripple aims to tokenize real-world assets, enhancing its custody offerings.

According to an Oct. 10 CNBC report, blockchain payments company Ripple has launched a new crypto custody service to assist banks and financial technology firms in storing digital assets for their clients. This move is part of the company’s broader expansion into the crypto custody sector through its subsidiary, Ripple Custody.

🚨BREAKING: Ripple launches crypto storage services for banks in bid to diversifyhttps://t.co/7msZcrQW2h

— Cobb (@AlexCobb_) October 10, 2024

The project includes features like pre-configured operational settings, integration with the XRP ledger, and anti-money laundering compliance monitoring. It also features an updated user interface. This move enables the company to diversify its offerings beyond payment settlements. In addition to its XRP crypto asset, Ripple is recognized for its RippleNet platform, a distributed network that enables banks to share updates on fund movement statuses.

Speaking to CNBC, senior vice president of products at Ripple, Aaron Slettehaugh, stated:

“With new features, Ripple Custody is expanding its capabilities to better serve high-growth crypto and fintech businesses with secure and scalable digital asset custody.”

Ripple Expands into RWA Tokenization and Stablecoins while Strengthening Custody Services

Ripple is making a significant investment in the growing trend of tokenizing real-world assets (RWAs), allowing these assets to be traded as digital tokens. Through its custody services, customers will be able to tokenize assets such as fiat currencies, commodities like gold and oil, and even real estate using Ripple’s XRP Ledger. Consequently, it will allow buyers and sellers to trade different digital assets directly, facilitating faster transactions with lower fees without intermediaries.

To strengthen its crypto custody business, Ripple has made significant acquisitions. Last year, it acquired Metaco, a company focused on crypto storage and management. This year, Ripple continued its expansion by acquiring Standard Custody & Trust Company, another firm in the crypto custody space.

Besides this, Ripple is preparing to enter the stablecoin market with its forthcoming stablecoin, Ripple USD (RLUSD). Currently, RLUSD is in beta testing, with trials being conducted on both the XRP Ledger and Ethereum blockchains. 

Custody Market Sees Rapid Growth

Today’s announcement marks one of the initial steps by the blockchain startup to consolidate its crypto custody services under the newly established brand, Ripple Custody, while directly competing with established players like Coinbase and Gemini.

While the crypto custody sector is still in its early stages, it is rapidly growing. Currently, Coinbase serves top clients such as BlackRock, providing Bitcoin custody for the IBIT ETF. Additionally, traditional banking institutions are entering the market, with BNY Mellon obtaining a custodial license last month.

BNY, America’s largest custodian bank, was identified as having received a “variance” from following the SEC’s SAB 121 accounting guidelines for its institutional crypto custody business.

As part of a broader federal update on Monday, Chris Land, general counsel for U.S. Senator… https://t.co/40XN9f00dd

— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) September 20, 2024

Custodians play a crucial role in the crypto market by offering secure storage for private keys. In addition to protecting cryptocurrencies, custodians help with payments, settlements, trading, and ensuring compliance with global regulations related to digital currencies.

The Boston Consultancy Group forecasts that the crypto custody market will reach $16 trillion by 2030. Ripple believes that custody is the fastest-growing segment, with its custodial platform experiencing 250% consumer growth this year. Ripple Custody operates in seven countries and counts top clients such as HSBC, Societe Generale, the Swiss branch of BBVA, and DBS among its customers.