Ripple Labs finalized its acquisition of Standard Custody, a digital asset custodian, on June 11. This acquisition, which was initially announced earlier this year, plays a crucial role in Ripple’s strategy to launch a United States dollar stablecoin and expand into real-world asset tokenization.
As part of the agreement, Jack McDonald, the CEO of Standard Custody, will now serve as Ripple’s senior vice president of stablecoins while retaining his position as the CEO of Standard Custody.
One of the key aspects of Standard Custody that caught Ripple’s attention was its licensing, particularly its regulatory approval from the New York Department of Financial Services (NYDFS), known for its stringent oversight of digital assets.
The purchase of Standard Custody follows Ripple’s previous acquisition of Metaco, another digital asset custody firm, for $250 million in 2023. Ripple’s investment in Metaco was based on the belief that the institutional crypto custody industry is set to grow to $10 trillion by 2030, as banks increasingly look to offer digital asset custody services to their clients.
The concept of real-world asset tokenization is gaining traction, with estimates suggesting that the market could exceed $800 trillion if all the world’s capital assets are tokenized. Firms like Ripple Labs, Chainlink, and Algorand are focusing on this emerging market, viewing it as the next frontier for cryptocurrencies, blockchain, and digital assets.
In a recent development, the Depository Trust and Clearing Corporation (DTCC) conducted a pilot program on real-world asset tokenization in collaboration with major banks such as JP Morgan, Edward Jones, and BNY Mellon. This program, which utilized Chainlink’s CCIP interoperability protocol, aimed to test the tokenization of fund data and explore the integration of real-world data onto the blockchain.
The results of the pilot program highlighted several benefits of blockchain tokenization, including streamlined data management, reduced record-keeping requirements, transparent APIs for customers, and the ability to manage data dynamically throughout an asset’s life cycle.
This pilot program offered valuable insights into the potential applications of blockchain tokenization for banks and institutional players, such as enhancing brokerage services or automating data feeds.
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