Ripple launches cryptocurrency custody service

Ripple Labs, the startup that handles XRP, recently launched its cryptocurrency custody solution for several banks and fintechs. With this, these institutions will be able to store digital assets on behalf of their clients more securely.

The launch comes as the Federal Reserve (Fed) has been cracking down on several traditional banks that offer custody services to cryptocurrency companies. Furthermore, custody legislation is still progressing slowly in the US, making it difficult for companies operating in this sector.

Ripple Cryptocurrency Resources and Custody

During an interview with CNBC, Ripple stated that its service will bring a variety of features. According to the company, the main customer will be banks and fintechs, while these will be able to offer the solution to customers.

This will be a fledgling business for the company as part of its newly formed Ripple Custody division. Last month, in September, Ripple CEO Brad Garlinghouse already stated that the company would focus on this market.

With the launch of Ripple Custody, the company has ensured that it meets all regulatory requirements in this process. This includes pre-configured operational and policy settings, along with integration with the XRP Ledger, which has introduced important updates recently.

Additionally, to maintain compliance, the cryptocurrency custody platform will monitor money laundering risks along with introducing a new user-friendly and engaging interface.

This is a big step by the company to diversify beyond its RippleNet payments settlement business. Aaron Slettehaugh, SVP of Product at Ripple, spoke about the new launch:

“With new features, Ripple Custody is expanding its capabilities to better serve high-growth cryptocurrency and fintech companies with secure and scalable digital asset custody.”

Facing giants like Coinbase and Gemini

This Thursday's announcement (10) is one of Ripple's first steps to consolidate its cryptocurrency custody services under the Ripple Custody brand, while also facing competition from big names like Coinbase and Gemini.

Cryptocurrency custody businesses are still nascent, but they are rapidly growing in the market. Coinbase serves some of the market's main clients, such as BlackRock, which uses the exchange to custody the BTC of its ETF (IBIT).

Now, traditional banks are also starting their services: BNY Mellon secured a license to provide cryptocurrency custody last month.

Custodians are essential to the cryptocurrency market, providing secure storage for private keys. Although the ideal would be for investors to do this, companies cannot self-custody these assets. Therefore, these services have a strong market niche.

In addition to protecting cryptocurrencies, custodians assist with payments, settlements, trading and ensure compliance with global regulations governing digital currencies.

The Boston Consultancy Group predicts that the cryptocurrency custody market will grow to $16 trillion by 2030. Ripple believes that custody is the fastest growing area, with its custody platform already seeing 250% growth in consumption this year. year.

Integration with XRP Ledger

Ripple is also betting on the real-world asset (RWA) tokenization market and stated that it would extend its custody services to tokenize different RWAs such as fiat currencies, gold, oil, and real estate, using the XRP Ledger.

According to the company, the XRP Ledger will provide companies with access to its native decentralized exchange. Furthermore, it will also allow buyers and sellers to trade various digital assets directly without intermediaries, enabling faster transactions with lower fees.

To boost its cryptocurrency custody business, Ripple has been making important acquisitions. Last year, it acquired Metaco, a company specializing in cryptocurrency storage and management.