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12/06/24
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Ripple Labs Successfully Acquires Standard Custody
On June 11, Ripple Labs successfully acquired the digital asset custodian known as Standard Custody, after closing the deal that was first announced a few months ago. The acquisition is critical to Ripple’s planned rollout of a USD stablecoin as well as venturing into tokenization of real-world assets.
The appointment of Standard Custody CEO Jack McDonald as Ripple’s senior vice president of stablecoins is part of the deal. However, McDonald will remain as Standard Custody’s CEO. Standard Custody holds a license from the New York Department of Financial Services (NYDFS), making it a point of attraction, as the NYDFS is among the strictest financial regulators in terms of digital assets.
Last year, Ripple Labs also acquired another digital asset custody company Metaco for $250M, based on expectations of institutional cryptocurrency industry reaching $10 trillion in six years from now. Banks have continued to look into how to offer their customers digital asset custodial services.
Custody services are becoming increasingly attractive as real-world asset tokenization promises to be quite useful. Chainlink’s analysis shows the possibility of real-world asset tokenization value to rise to more than $800T if the capital assets globally are tokenized.
Companies such as Algorand, Chainlink and Ripple Labs are focusing on real-world asset tokenization based on the belief that it is the immediate big frontier for digital assets and blockchain.
Last month, a report released by the Depository Trust and Clearing Corporation (DTCC) showed that a real-world asset tokenization pilot program was carried out between the DTCC and a number of banks, including JP Morgan, Edward Jones and BNY Mellon. The pilot program reportedly adopted Chainlink’s CCIP interoperability protocol.
The focus of the pilot program was on testing fund data tokenization as well as simulating the emergence of real-world data onchain. The program helped them to realize the potential applications of tokenization for institutional operators such as banks.
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