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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 their clients. .
The San Francisco-based company told CNBC it is launching a series of features to enable its banking and fintech clientele to custody and maintain digital tokens — part of a broader push toward custody, a business emerging for Ripple as part of its recently created Ripple Custody division. .
These features include pre-configured 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 is easier to use and engage with. .
The move will help Ripple, primarily known for the XRP cryptocurrency and its RippleNet platform, diversify beyond its core payment settlement business. RippleNet is a messaging platform based on blockchain – the technology behind 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 move to consolidate its custody products under a single brand, Ripple Custody, and take on a large number of companies that already offer products and services in this area, such as such as Coinbase, Gemini and Fireblocks.
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Custody is a nascent but rapidly growing space in digital assets. Custodians play a key role in the crypto market, helping clients protect private keys, which are the alphanumeric codes needed to unlock access to digital assets and authorize transactions.
Custodians don’t just store cryptocurrencies. They also facilitate payments and settlements, exchanges 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 the Boston Consulting Group.
Ripple said custody is one of the fastest growing areas for the startup, with Ripple Custody this year seeing customer growth of more than 250% year-over-year and operating in seven countries. . Its clients include HSBC, the Swiss branch of BBVA, Société Générale and DBS.
Betting that an increasing number of real-world assets will become tradable as digital tokens in the future, Ripple said it would allow customers of its custody services to tokenize real-world assets – think fiat currencies , to commodities like gold and oil or to real estate – using XRP Ledger.
Ripple said the integration with its XRP Ledger technology would give businesses access to its own native decentralized exchange, a platform that helps connect buyers and sellers of a range of digital assets without any intermediary for faster and low-cost exchanges.
“With new features, Ripple Custody expands its capabilities to better serve high-growth crypto and fintech companies with secure, scalable custody of digital assets,” said Aaron Slettehaugh, senior vice president of product at Ripple, in a statement shared Thursday with CNBC. .
Last year, Ripple acquired Metaco, a company that helps other entities store and manage their cryptocurrencies, in a bid to bolster its nascent cryptocurrency custody business. The company also acquired Standard Custody & Trust Company, another cryptocurrency custody company, this year to further strengthen its efforts.
Ripple’s diversification offering comes at a difficult time for XRP. Last week, the price of the XRP cryptocurrency fell sharply after the United States Securities and Exchange Commission appealed a 2023 court ruling that the token should be used. not to be considered a guarantee when sold to retail investors.
As the largest holder of XRP coin, Ripple has long battled the SEC over allegations that it sold the cryptocurrency in an illegal securities offering. Ripple denies that cryptocurrency should be considered security.