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US blockchain startup Ripple on Thursday made a major foray into the cryptocurrency custody space, launching a new service aimed at helping banks and financial technology companies store digital assets on behalf of their customers. .
The San Francisco-based company told CNBC it will debut a number of features to help banks and fintech customers store and maintain digital tokens. This is part of a broader custody effort, an early venture for Ripple under its recently established Ripple Custody division. .
These features include preconfigured operational and policy settings, integration with Ripple’s XRP Ledger blockchain platform, anti-money laundering risk monitoring to maintain compliance, and a new user interface that’s easier to use and engage with. Includes:
The move will help Ripple, primarily known for its cryptocurrency XRP and its RippleNet platform, diversify beyond its core payments business. RippleNet is a messaging platform based on blockchain (the technology that underpins cryptocurrencies such as Bitcoin) that allows banks to share up-to-date information about the status of their funds transfers across a global decentralized network.
Thursday’s development means Ripple will consolidate its custody products under one brand, Ripple Custody, and partner with a number of companies that already offer products and services in this space, including Coinbase, Gemini, and Fireblocks. , marking Ripple’s first significant move.
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Custody is a nascent but rapidly growing space within the digital asset space. Custodians play an important role in the cryptocurrency market, helping clients protect their private keys, which are alphanumeric codes needed to unlock access to digital assets and authorize transactions.
Custodians do more than just store cryptocurrencies. It also helps ensure regulatory compliance with global laws governing payments and settlements, transactions, and digital currencies. According to , the crypto custody market is expected to reach at least $16 trillion by 2030. boston consulting group.
Ripple says custody is one of its fastest growing areas, with Ripple Custody recording more than 250% year-over-year customer growth this year and operating in seven countries. said. The company counts HSBC, the Swiss arm of BBVA, Société Générale and DBS among its clients.
Betting that more and more real-world assets will be tradable as digital tokens in the future, Ripple is betting that customers of its custody services will be able to trade real-world assets (fiat currencies, commodities like gold and oil, real estate). etc.) can be tokenized. Using the XRP Ledger.
Ripple said the integration with its XRP Ledger technology will give businesses access to its native decentralized exchange. The platform helps match buyers and sellers of various digital assets for faster, lower-fee trading without intermediaries.
“Ripple Custody is expanding its capabilities with new features to better serve high-growth crypto and fintech businesses with secure and scalable digital asset storage,” said Aaron, Ripple Senior Vice President of Products.・Threathoo said in a statement shared with CNBC on Thursday. .
Last year, Ripple acquired Metaco, a company that helps other companies store and manage cryptocurrencies, to strengthen its nascent crypto custody business. This year, the company also acquired another crypto asset management company, Standard Custody & Trust Company, to further strengthen its efforts.
Ripple’s diversification bid comes at a sensitive time for XRP. Last week, the price of the cryptocurrency XRP plunged after the U.S. Securities and Exchange Commission filed an appeal against a 2023 court ruling that the token should be used. Not considered a security When sold to individual investors.
Ripple, the largest holder of the XRP coin, has been in a long-running battle with the SEC over allegations that it sold the cryptocurrency in an illegal securities offering. Ripple denies that cryptocurrencies should be considered securities.
