Ripple Labs Acquires Standard Custody for USD Stablecoin Plans

Ripple XRP

This acquisition follows Ripple’s 2023 purchase of another digital asset custody firm, Metaco, for $250 million.

Ripple Labs announced on June 11 that it has completed the purchase of Standard Custody, a company that handles digital assets. This deal, first announced earlier this year, is important for Ripple’s plans to launch a U.S. dollar stablecoin and expand its efforts in real-world asset tokenization.

As a result of the deal, Standard Custody CEO Jack McDonald will become Ripple’s senior vice president of stablecoins. Ripple emphasized that Standard Custody has a license from the New York Department of Financial Services (NYDFS), which is one of the toughest regulators for digital assets. This licensing is a key feature that Ripple values highly.

Ripple’s Strategic Moves

This acquisition follows Ripple’s 2023 purchase of another digital asset custody firm, Metaco, for $250 million. Ripple believes that the market for institutional crypto custody will grow significantly, reaching $10 trillion by 2030 as more banks start offering digital asset services to their customers.

Real-world asset tokenization is a growing field with enormous potential. According to Chainlink, if all the world’s capital assets were tokenized, the market could exceed $800 trillion. Companies like Ripple, Chainlink, and Algorand are focusing on this area, believing it to be the next big opportunity in the world of cryptocurrencies and blockchain technology.

In May, the Depository Trust and Clearing Corporation (DTCC) released a report about a real-world asset tokenization test. This test was conducted with major banks like JP Morgan, Edward Jones, and BNY Mellon using Chainlink’s Cross-Chain Interoperability Protocol (CCIP). 

The purpose of the test was to tokenize fund data and simulate bringing real-world data onto the blockchain. According to the DTCC report, several benefits of blockchain tokenization were identified. These include automated data management, reduced need for manual record-keeping, transparent APIs for customers, and dynamic data management throughout the life cycle of an asset.

The pilot program provided valuable insights into future applications of blockchain tokenization for banks and institutions. Potential uses include brokerage services, automated data feeds, and other financial services benefiting from blockchain’s efficiency and transparency. Ripple and other companies are leading the way in exploring these opportunities to revolutionize the financial industry through advanced digital asset management and tokenization.