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US blockchain startup Ripple made a major foray into cryptocurrency custody on Thursday, launching new services aimed at helping banks and fintech companies store digital assets on behalf of customers.
The San Francisco-based company told CNBC that it is debuting a slew of features to enable its banking and fintech clients to hold and preserve digital tokens — as part of a broader push for staking, a Ripple startup under its formed Ripple Custody division. recently. .
These features include pre-configured operational and policy settings, integration with Ripple's XRP Ledger blockchain platform, AML risk monitoring to maintain compliance, and a new user interface that is easier to use and share.
The move will help Ripple, primarily known for its XRP cryptocurrency and its RippleNet platform, diversify beyond its core payments settlement business. RippleNet is a messaging platform based on blockchain technology – the technology that underpins cryptocurrencies such as Bitcoin – that allows banks to share updates on the status of money movements in a distributed global network.
Thursday's development marks Ripple's first significant step to consolidate its custodial products under one brand, Ripple Custody, taking on a slew of companies that already offer products and services in this space, such as Coinbase, Gemini and Fireblocks.
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Custody is an emerging but rapidly growing field in the digital assets space. Custodians play a key role in the cryptocurrency market, helping customers protect private keys, which are the alphanumeric codes required to open access to digital assets and allow transactions.
Custodians don't just store cryptocurrencies. They also assist in payments, settlements, and trading processes and ensure regulatory compliance with global laws governing digital currencies. The cryptocurrency custody market is expected to reach at least $16 trillion by 2030, according to Boston Consulting Group.
Ripple said incubation is one of the fastest-growing areas for startups, with Ripple Custody recording customer growth of more than 250% year-on-year this year and operating in seven countries. It counts the likes of HSBC, the Swiss arm of BBVA, Société Générale and DBS among clients.
Betting that an increasing number of real-world assets will become tradable as digital tokens in the future, Ripple said it will allow customers of its custodial services to tokenize real-world assets — think fiat currencies, commodities like gold, oil or real estate — using the XRP Ledger.
Ripple said the integration with its XRP Ledger technology will give companies access to its native decentralized exchange, a platform that helps match buyers and sellers of a range of digital assets without the involvement of any intermediaries for faster trading with lower fees.
“With the new features, Ripple Custody expands its capabilities to better serve high-growth cryptocurrency and fintech companies with safe and secure digital asset custody,” Aaron Slitto, senior vice president of product at Ripple, said in a statement shared with CNBC on Thursday. For development.” .
Last year, Ripple acquired Metaco, a company that helps other entities store and manage their cryptocurrencies, in an effort to boost its fledgling cryptocurrency custody business. This year, the company also acquired Standard Custody & Trust Company, another cryptocurrency custodian, to bolster its efforts.
Ripple's diversification offer comes at a weak time for XRP. Last week, the price of the cryptocurrency XRP fell sharply after the US Securities and Exchange Commission filed an appeal of a 2023 court ruling that the token should not be considered a security when sold to retail investors.
As the largest holder of XRP, Ripple has been locked in a long battle with the Securities and Exchange Commission over allegations that it sold the cryptocurrency in an illegal securities offering. Ripple denies that the cryptocurrency should be considered a security.
