San Francisco-based payments network provider, Ripple, launched a move into the crypto custody market this week as it announced the acquisition of Swiss crypto custodian, Metaco. The XRP creator reportedly splashed out $250 million on the deal, which will see it expand its product suite and gain access to several major international banking clients.
The institutional crypto custody market is expected to hit $10 trillion by 2030, and Ripple plans to offer custody, issue and settlement of any tokenized asset to its enterprise customers. Research carried out by the company suggests that a majority of global financial institutions intend to access crypto custody solutions within the next three years.
Metaco will continue to operate as an independent business under founder and CEO Adrien Treccani. The digital asset custodian and tokenization provider will dramatically accelerate its growth plans through access to Ripple’s customer base, capital and resources, as Treccani explained:
“This deal will enable Metaco to leverage Ripple’s scale and market strength to reach our goals and deliver value to our clients at a faster pace. We look forward to continuing to serve unprecedented levels of institutional demand with the utmost excellence in delivery, as our clients have come to expect.”
As Observers reported back in February, Metaco’s client list reads like a Who’s Who of key global financial players, including institutions such as BNP Paribas, Société Générale, BBVA, UnionBank and Citi. Its Harmonize platform facilitates the commercial launch of complex products featuring institutional-grade security and compliance, and was developed in partnership with major banks.
Ripple CEO Brad Garlinghouse also indicated that the deal would give the company an increased presence outside of its native US, where it has been defending itself against legal action from the Securities and Exchange Commission. In December 2020 the regulatory agency sued Ripple and two of its executives (one being Garlinghouse) for an alleged undeclared securities sale regarding the company’s XRP token.
The action, which has been ongoing since this time, has thus far cost Ripple around $200 million in legal and other costs according to Garlinghouse. A federal judge recently denied a motion from the SEC to seal records of its internal deliberations following a 2018 speech by former director William Hinman, in which he stated that Ether is not a security.
Ripple seems to be taking the initiative and expanding its footprint globally as the US authorities continue to make the country less and less relevant when it comes to blockchain innovation.
As always, we will Observe what happens next with interest.