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U.S. blockchain startup Ripple made a serious foray into crypto custody on Thursday, launching latest services aimed toward helping banks and financial technology firms to store digital assets on behalf of clients.
The San Francisco-based company told CNBC it’s debuting a slew of features to enable its banking and fintech clientele to maintain and maintain digital tokens — as a part of a broader push into custody, a nascent business for Ripple under its recently formed Ripple Custody division.
These features include pre-configured operational and policy settings, integration with Ripple’s XRP Ledger blockchain platform, monitoring of anti-money laundering risks to keep up compliance, and a latest user interface that is easier to make use of and have interaction.
The move will help Ripple, which is primarily known for the XRP cryptocurrency and its RippleNet platform, to diversify beyond its core payment settlement business. RippleNet is a messaging platform based on blockchain — the technology that underpins cryptocurrencies akin to bitcoin — which lets banks share updates on the status of cash movements in a world, distributed network.
Thursday’s development marks Ripple’s first significant move to consolidate its custody products under one brand, Ripple Custody, and tackle a slew of firms that already offer services and products on this space, akin to Coinbase, Gemini, and Fireblocks.
Custodian
Custody is a nascent but fast-growing space inside the digital asset space. Custodians play a key role within the crypto market, helping clients safeguard private keys, that are the alphanumeric codes required to unlock access to digital assets and authorize transactions.
Custodians don’t just store crypto. In addition they help with payments and settlements, trading, and ensuring regulatory compliance with global laws governing digital currencies. The crypto custody market is forecast to achieve no less than $16 trillion by 2030, in line with the Boston Consulting Group.
Ripple said that custody is one in all the fastest-growing areas for the startup, with Ripple Custody posting customer growth of over 250% year-over-year growth this 12 months and operating in seven countries. It counts the likes of HSBC, the Swiss arm of BBVA, Societe Generale and DBS as clients.
Gambling that a growing variety of real-world assets will develop into tradable as digital tokens in the long run, Ripple said it should allow customers of its custody services to tokenize real-world assets — think fiat currencies, commodities like gold and oil or real estate — by utilizing XRP Ledger.
Ripple said that the mixing with its XRP Ledger tech would give firms access to its own native decentralized exchange, a platform that helps match buyers and sellers of a spread of digital assets with none middlemen involved for faster, low-fee trading.
“With latest features, Ripple Custody is expanding its capabilities to raised serve high-growth crypto and fintech businesses with secure and scalable digital asset custody,” Aaron Slettehaugh, senior vp of product at Ripple, said in an announcement shared with CNBC on Thursday.
Last 12 months, Ripple acquired Metaco, a firm that helps other entities store and manage their crypto, in a bid to spice up its nascent crypto custody business. The corporate this 12 months also acquired Standard Custody & Trust Company, one other crypto custody firm, to further bolster its efforts.
Ripple’s diversification bid comes at a tenuous time for XRP. Last week, the worth of the XRP cryptocurrency tumbled sharply after the U.S. Securities and Exchange Commission filed to appeal a 2023 court ruling that the token should not be considered a security when sold to retail investors.
As the biggest holder of XRP coins, Ripple has long battled the SEC over allegations that it sold the cryptocurrency in an illegal securities offering. Ripple denies the cryptocurrency must be considered a security.
