Ripple Labs has officially completed its acquisition of Standard Custody, a digital asset custodian, on June 11. This agreement, which was initially announced earlier this year, plays a crucial role in Ripple’s strategy to introduce a United States dollar stablecoin and expand its objectives of tokenizing real-world assets.
As part of this acquisition, the CEO of Standard Custody, Jack McDonald, will take on the role of Ripple’s senior vice president of stablecoins while continuing to serve as the CEO of Standard Custody.
Ripple has emphasized the significance of Standard Custody’s licensing, particularly highlighting its regulatory approval from the New York Department of Financial Services (NYDFS), known for its stringent regulations on digital assets.
This acquisition of Standard Custody follows Ripple’s previous purchase of Metaco, another digital asset custody firm, for $250 million in 2023. Ripple’s investment in Metaco was driven by the belief that the institutional crypto custody industry is poised to reach $10 trillion by 2030 as banks increasingly show interest in offering digital asset custody services to their clients.
The emerging trend of real-world asset tokenization is a key area of focus for companies like Ripple Labs, Chainlink, and Algorand. This market has the potential to grow to over $800 trillion if all of the world’s capital assets are tokenized, as estimated by Chainlink.
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 initiative leveraged Chainlink’s CCIP interoperability protocol to tokenize fund data and explore the integration of real-world information into blockchain. The benefits identified by the DTCC’s report include automated data management, reduced record-keeping requirements, transparent APIs for customers, and dynamic data management throughout the asset life cycle.
Ultimately, this pilot program has shed light on the potential applications of blockchain tokenization for banks and other institutional players seeking to incorporate this technology into their products and services, such as brokerage applications and automated data feeds.
The focus on real-world asset tokenization underscores the growing interest in this sector among key players in the cryptocurrency, blockchain, and digital asset industries.