- Citigroup is rethinking its digital-assets custody partnership with Swiss fintech firm Metaco following Metaco’s recent acquisition by Ripple Labs.
- Ripple’s takeover of Metaco, which offers tokenization services, forms a key part of its strategy to expand beyond payments, positioning Metaco to support tokenization, settlement, and custody of diverse assets.
Citigroup Inc. is reportedly reassessing its digital-assets custody partnership with Swiss fintech entity Metaco. In the wake of Ripple Labs Inc.’s recent $250 million acquisition of Metaco, Citigroup has initiated informal discussions with other custody providers, as per insiders who chose to remain anonymous due to the confidential nature of the matter.
The Ripple-Metaco Deal and Its Implications
Ripple’s acquisition of Metaco, concluded last month, is a strategic move aimed at diversifying beyond payment services. Metaco, known for its tokenization services, empowers Ripple’s clients with the capability to tokenize, settle, and safely custody a variety of assets. Tokenization involves creating digital replicas of assets using blockchain technology, facilitating secure, transparent transactions and ownership tracking.
The impact of Ripple’s acquisition on Citigroup’s review of their partnership with Metaco remains undisclosed. Ripple, when announcing the deal, stated that Metaco would continue to operate as an independent brand, helmed by its CEO, Adrien Treccani.
As the traditional financial firms foray into the digital-assets industry, startups, particularly in custody, are seizing the emerging opportunities. Nonetheless, several companies have concluded partnerships with crypto custodians this year, highlighting the rapid technological change’s challenges smaller firms face.
The Larger Crypto Custody Picture
The crypto custody topic gained traction in the industry following several notable firms’ failure last year, which left numerous investors with inaccessible assets. Ripple, based in San Francisco, predicts the crypto custody market could approach nearly $10 trillion by 2030 for institutions alone.
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Simultaneously, Metaco has inked partnerships with BNP Paribas SA and Societe Generale SA’s digital asset subsidiary, Forge. While the status of the BNP Paribas partnership remains unknown, Societe Generale has confirmed its partnership with Metaco to be operational.
Meanwhile, Ripple’s investment in Metaco seems to echo research that projects an uptick in blue-chip investors incorporating crypto custody services into their business models within three years.
Despite these developments, Ripple’s digital currency XRP exhibits a stagnation in price performance, trading at $0.48, reflecting a fractional decrease in the last 24 hours.
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