Ripple's Metaco Acquisition: A Leap Forward for Banks in Crypto World

• Metaco in Partnership with HSBC: Ripple's Influence in Play
• The Crypto Space: Loyalties and Beliefs
• Correlation Between Ripple Protocols and Metaco's Banking Clients
• Ripple's Efforts and Achievements
• Benefits of XRPL and the Combination of Metaco and Ripple
• Effects of Metaco's Acquisition on its Banking Customers
• HSBC's Journey towards Tokenization

Metaco in Partnership with HSBC: Ripple's Influence in Play

Metaco, a Swiss digital assets custody firm acquired by Ripple in the beginning of the year, is now collaborating with HSBC, one of the world's biggest banks. This news brought joy to many supporters of the U.S. fintech's ledger protocol, collectively referred to as the "XRP$0.620 -1.68% army." This group, named after the cryptocurrency designed to move liquidity around the XRP Ledger utilized by Ripple, views HSBC's selection of a custody tech partner as an additional indication that financial institutions will eventually embrace XRPL and, importantly, the XRP token.

The Crypto Space: Loyalties and Beliefs

The world of cryptocurrency is notably tribal. Token holders are eager for their chosen blockchain to gain prominence and deliver a substantial return, sometimes to an extent that defies reason. One example of this is the belief that Ripple's recent acquisition incited HSBC's decision, disregarding the fact that Metaco had been wooing the bank for more than 18 months. This fact was disclosed by Adrien Treccani, the CEO of the Swiss custody firm.

Correlation Between Ripple Protocols and Metaco's Banking Clients

Despite this, Treccani indicates an indirect correlation between Ripple protocols and Metaco's banking clients. He states that the adoption of Ripple and Metaco's solutions foster the adoption of the XRPL as a protocol. According to him, every success of Ripple as a company is also a triumph for the XRP Ledger.

Ripple's Efforts and Achievements

Ripple has diligently pursued banks, aiming to reduce friction in areas such as cross-border payments. As a result, XRPL remains one of the longest-standing examples of a private tokenization blockchain, Treccani noted.

Benefits of XRPL and the Combination of Metaco and Ripple

"XRPL is designed for both public and private use and outperforms market competitors like the EVM chains," Treccani said, with reference to the Ethereum$2,315 -2.42% Virtual Machine. He added that it inherently supports tokenized assets rather than relying on smart contracts, and also enables on-chain trading with other blockchain-based exchanges or AMMs (automated market makers). By combining Metaco and Ripple, a comprehensive vertical stack is offered, which includes an infrastructure layer and a services layer.

Effects of Metaco's Acquisition on its Banking Customers

However, following Metaco's acquisition, rumors began to circulate that some of its banking customers were considering taking their business elsewhere, possibly due to Ripple's disagreement with the U.S. Securities and Exchange Commission (SEC). Treccani dismissed some of these rumors as "frankly a little bit crazy", acknowledging that post-acquisition reassessments by clients are standard, and that many of the agreements signed with the banks may be subject to change-of-control clauses.

HSBC's Journey towards Tokenization

Like numerous large banks, HSBC is aligning with the trend of tokenization, which involves managing the ownership and transfer of real-world assets on blockchains, requiring robust digital asset custody tech. Treccani maintained that the cryptocurrency libertarian mindset is his primary drive. He believes that many banks will eventually want to offer cryptocurrency-related services and that setting up for tokenization now will provide these institutions with everything they need for cryptocurrency entry when the time comes.

Edited by Jonathan Stoker