Ripple has extended its reach in the blockchain space, launching a cryptocurrency storage and management service for banks, among other financial technology (fintech) companies.
The move expands the firm’s custodial services and could help advance other infrastructure offerings within Ripple’s ecosystem.
Ripple to Help Banks and Fintech Players Store Digital Tokens
Ripple is expanding beyond its core payment settlement business with a new venture aimed at helping banks manage their crypto assets. According to a CNBC report, this marks the launch of Ripple Custody, consolidating its various custody products under one service.
Ripple already serves banks with RippleNet, a messaging platform that enables global money transfer updates. However, this new venture positions Ripple in competition with established crypto custody providers like Coinbase, Gemini, and Fireblocks.
Ripple plans to stand out by offering features such as customized operational settings, policy controls, integration with the XRP Ledger blockchain, enhanced compliance monitoring, and a more intuitive user interface.
“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,” said Aaron Slettehaugh, Senior Vice President of Products at Ripple.
Read more: 9 Best Blockchain Protocols To Know in 2024
In addition to custody services, Ripple will assist client banks and fintech firms with payment processing, settlements, and trade facilitation.
Ripple Custody taps into a one of the fastest-growing sectors, with Boston Consulting Group predicting the crypto custody market could reach $16 trillion by 2030. This strategic move reflects Ripple’s ambitions to capitalize on the expanding demand for secure crypto asset management.
Clients Can Tokenize RWAs Using XRP Ledger
Ripple Custody’s latest venture will also allow clients to tokenize real-world assets (RWAs) such as fiat currencies, gold, oil, and real estate on the XRP Ledger (XRPL). Ripple is betting on the growing trend of tokenized RWAs becoming tradable as digital assets in the future.
The XRP Ledger, a Layer-1 blockchain supporting XRP and other tokens, facilitates payments, tokenization, decentralized finance (DeFi), central bank digital currencies (CBDCs), and stablecoins.
It offers fast, low-cost, and secure transactions for both crypto-native tokens and RWAs. By integrating with XRPL, firms gain access to Ripple’s decentralized exchange, enabling direct, low-fee trading between buyers and sellers.
Ripple Custody has seen over 250% year-on-year customer growth, driven by acquisitions of Metaco and Standard Custody & Trust Company. This move strengthens Ripple’s custody capabilities and ensures regulatory compliance, as more institutions explore tokenization.
Ripple operates in multiple countries, with major banks like HSBC, BBVA, Societe Generale, and DBS supporting the platform. These firms use Ripple’s regulated custody services, along with Zodia Custody, through Metaco. Ripple’s focus on tokenization could also strengthen its central bank digital currency infrastructure, creating CBDCs fully backed by tokenized real-world assets.
Read more: What Are Tokenized Real-World Assets (RWA)?
Additionally, Ripple plans to enter the stablecoin market with its Ripple USD (RLUSD) product, currently in beta testing. While RLUSD shows promise, it will face tough competition in an already crowded stablecoin space.
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