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HSBC Set to Launch a Digital Assets Custody Service

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HSBC, Europe’s banking giant, has taken a significant leap into the digital asset space by announcing its new custody service for tokenized securities. This move positions HSBC at the forefront of major financial institutions integrating blockchain technology into traditional banking services.

According to a report by CNBC, the bank is partnering with Swiss crypto custody firm Metaco, which was acquired by FinTech firm Ripple back in May, to facilitate the secure storage of digital bonds and other securities. This service, which is set to launch in 2024, is a natural extension of HSBC’s existing digital asset initiatives, including the HSBC Orion platform for digital asset issuance and its recent venture into tokenized physical gold offerings.

On 17 May 2023, Ripple announced the acquisition of Metaco, a Swiss firm specializing in digital asset custody and tokenization services. This was a strategic move by Ripple to expand its enterprise solutions, allowing clients to manage, issue, and settle tokenized assets effectively.

Read Also: British Banking Giant, HSBC, Announces Its Cooperation with Ripple!

Metaco has established itself as a trusted name in institutional digital asset custody, boasting a portfolio of high-caliber institutional clients and a history of partnerships with regulated entities to create secure, enterprise-grade solutions. Ripple’s CEO, Brad Garlinghouse, praised Metaco’s strong reputation and its potential for growth with Ripple’s support, emphasizing the commitment to continue serving banking and institutional clients.

Metaco’s flagship product, Harmonize™, offers institutions a robust custody infrastructure trusted by leading global custodians, banks, and financial institutions. Utilizing the Harmonize platform, HSBC aims to provide a seamless and secure management system for digital asset operations. Harmonize is designed to offer institutional-grade security, unifying the various aspects of digital asset management under one roof.

The CNBC report mentions that introduction of custody services for tokenized securities by HSBC follows in the footsteps of BNY Mellon, another banking giant that embraced digital asset custody in 2021. Tokenized securities represent regulated assets such as bonds and equities but in a token form on a blockchain, which is essentially a shared digital ledger. While originally the backbone for cryptocurrencies like bitcoin, blockchain’s utility in banking extends to digitizing traditional assets for payments, trading, and more, often without involving digital currencies directly.

According to HSBC’s press release, Zhu Kuang Lee, HSBC’s Chief Digital, Data, and Innovation Officer for Securities Services, indicated that there is a growing demand among asset managers and owners for the custody and administration of digital assets as the market matures. He emphasized that HSBC is responding to this need by developing a scalable and secure next-generation custody infrastructure through strategic partnerships, stressing the critical nature of innovation and collaboration in this era of change for asset servicers.

Read Also: HSBC and Ant Group Collaborate on Tokenized Deposits: A New Frontier in Banking

Adrien Treccani, CEO and Founder of Metaco, expressed enthusiasm about collaborating with HSBC in its journey to harness distributed ledger technology (DLT) for asset creation and custody. He pointed out that Metaco’s Harmonize platform is set to play a crucial role in the evolving interaction between issuers and investors, especially as capital markets and assets increasingly adopt distributed ledger representations.

John O’Neill, who leads HSBC’s Global Digital Assets Strategy in Markets and Securities Services, shared his excitement about the upcoming launch of HSBC’s digital asset custody service. This new offering is designed to work in synergy with HSBC Orion, the bank’s platform for issuing digital assets, and its recent initiative involving tokenized physical gold. O’Neill’s comments highlight HSBC’s dedication to fostering the growth of the digital asset markets.

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Cryptocurrency Market Update: Bitcoin Slips Below $70,000 Amidst High Liquidation

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In a swift turn of events, Bitcoin (BTC), the pioneering cryptocurrency, dropped below the $70,000 threshold early on Wednesday following a wave of investor sell-offs. Just a day prior, Bitcoin had crossed the $71,000 mark, but market sentiment swiftly shifted, dragging other major altcoins—including Ethereum (ETH), Dogecoin (DOGE), Ripple (XRP), Solana (SOL), and Litecoin (LTC)—into the red zone.

According to CoinMarketCap data, the overall Market Fear & Greed Index stood at 75 (Greed) out of 100, indicating a mix of optimism and apprehension among traders. Notably, the Bittensor (TAO) token emerged as the top gainer with a remarkable 24-hour surge of over 7 percent, while dogwifhat (WIF) experienced the largest loss, plummeting nearly 16 percent.

Bitcoin (BTC) Price Update Bitcoin’s price tumbled to $69,089.01, marking a 24-hour dip of 3.05 percent, as reported by CoinMarketCap. On the Indian exchange WazirX, BTC was priced at Rs 60.93 lakh.

Other Major Cryptocurrencies Ethereum (ETH) saw a 24-hour loss of 4.81 percent, trading at $3,508.86, while Dogecoin (DOGE) registered a dip of 5.59 percent, currently priced at $0.1879. Litecoin (LTC) and Ripple (XRP) also experienced losses, with Solana (SOL) marking a 24-hour loss of 3.44 percent.

Top Gainers and Losers Bittensor (TAO) led the pack of gainers with a 7.30 percent surge, while dogwifhat (WIF) suffered the most significant loss, dropping by 15.58 percent.

Market Analysis and Expert Insights Experts weighed in on the market scenario, attributing Bitcoin’s downturn to heightened liquidations and cautious sentiment ahead of the upcoming US CPI data release. While Bitcoin’s immediate support rests at $67,700, resistance is expected at $70,400. Ethereum proponents face challenges amid hopes for an ETF approval, with the SEC providing limited updates on the matter.

Final Thoughts The cryptocurrency market remains highly dynamic, with prices fluctuating rapidly and investor sentiment playing a pivotal role. As the market navigates through volatility, it’s essential for investors to stay informed, exercise caution, and seek expert advice before making any investment decisions.

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Cryptocurrency: A Scapegoat for Foreign Policy Failures?

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Cryptocurrency has once again found itself at the center of a heated debate, this time regarding its alleged role in facilitating illicit activities and circumventing sanctions imposed by the United States. The Biden administration, in particular, has come under scrutiny for its handling of the issue, with some accusing it of using digital assets as a convenient scapegoat for broader foreign policy shortcomings.

In a recent hearing before the Senate Banking Committee, Deputy Treasury Secretary Wally Adeyemo raised concerns about the misuse of cryptocurrencies by foreign adversaries such as Iran, Russia, North Korea, and militant groups like Hamas. Adeyemo’s remarks underscored a growing unease within the U.S. government regarding the potential national security implications of unregulated digital currencies.

However, voices from within the cryptocurrency industry and Congress have pushed back against the administration’s narrative. Faryar Shirzad, Chief Policy Officer at Coinbase, one of the leading cryptocurrency exchanges, pointed out that the prevalence of illicit activity in the crypto space is relatively low compared to traditional finance. Instead of demonizing cryptocurrencies, Shirzad argued, the focus should be on targeting bad actors operating offshore.

Senator Tim Scott, the ranking Republican on the Senate Banking Committee, echoed these sentiments, accusing the Biden administration of using digital assets as a distraction from its failure to effectively combat financial flows to sanctioned entities. Scott’s criticism reflects broader skepticism among some lawmakers about the government’s approach to regulating cryptocurrencies.

One area of potential agreement between the Biden administration and the cryptocurrency industry is the need for clearer regulations governing stablecoins, a type of digital asset pegged to a fiat currency like the U.S. dollar. Both sides recognize the importance of addressing the potential risks associated with stablecoin issuance and usage, particularly in the context of national security and financial stability.

The debate over stablecoins has intensified following reports of their alleged role in facilitating illicit transactions, including those linked to Russia’s war effort in Ukraine. The Treasury Department has called for increased oversight of stablecoin issuers and transactions, while also advocating for legislation that would subject them to stricter regulatory standards.

Despite the contentious nature of the discussion, there are signs of bipartisan cooperation on certain aspects of cryptocurrency regulation. A bipartisan bill addressing stablecoin regulation passed the House Financial Services Committee last year, signaling a potential path forward for legislative action in this area.

As the debate over cryptocurrency regulation continues to unfold, it is clear that finding the right balance between innovation and security will be paramount. While concerns about illicit activity and national security must be addressed, policymakers must also recognize the potential benefits of cryptocurrencies in fostering financial inclusion and technological advancement.

Ultimately, the resolution of these issues will require thoughtful collaboration between government officials, industry stakeholders, and lawmakers to develop a regulatory framework that promotes innovation while safeguarding against misuse. Only through constructive dialogue and cooperation can we ensure that cryptocurrencies fulfill their potential as a force for positive change in the global economy.

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Bitcoin Resurgence: Why Wall Street Is Embracing the Crypto Revolution

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Andrew Pratt of Wiser Wealth Management in Marietta, Ga., finds little resistance as he proposes Bitcoin investments to his firm’s committee. With Bitcoin surging 140% in the past year and backed by giants like BlackRock, skepticism has waned. Pratt sees the potential to allocate a modest 1% of client portfolios to Bitcoin, acknowledging the limited downside risk compared to potential gains.

The debate over Bitcoin’s intrinsic value seems to have lost its relevance amidst its soaring market performance. Once dismissed, Bitcoin now boasts a market value of $1.3 trillion, driving the total crypto market to $2.5 trillion. Wall Street, once wary, now views cryptocurrency as an opportunity for profit rather than a speculative venture.

Despite lingering doubts about Bitcoin’s utility beyond speculation, Wall Street executives are increasingly supportive. BlackRock’s CEO, Larry Fink, notably reversed his stance, endorsing Bitcoin’s long-term prospects and championing the iShares Bitcoin Trust, now one of the largest Bitcoin ETFs with nearly $18 billion in assets.

While skepticism persists about Bitcoin’s status as a real asset or currency, its growing acceptance on Wall Street underscores the evolving landscape of finance. As institutions embrace cryptocurrencies, Bitcoin’s journey from pariah to portfolio asset highlights the transformative power of digital assets in reshaping traditional investment strategies.

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