Ripple Labs closed its acquisition of Standard Custody, a digital asset custodian, on June 11. This deal, initially announced earlier this year, is pivotal for Ripple’s strategy to launch a United States dollar stablecoin and achieve broader goals in real-world asset tokenization.
As part of this acquisition, Jack McDonald, CEO of Standard Custody, will be appointed as Ripple’s senior vice president of stablecoins while continuing his role as CEO of Standard Custody.
Ripple emphasised the importance of Standard Custody’s licensing, highlighting its regulatory approval from the New York Department of Financial Services (NYDFS), a stringent financial regulator for digital assets.
This acquisition follows Ripple’s 2023 purchase of Metaco, another digital asset custody firm, for $250 million. Ripple believes that the institutional crypto custody industry will reach $10 trillion by 2030, driven by banks’ growing interest in providing digital asset custodial services.
Custody services also encompass the emerging field of real-world asset tokenization, which could grow to over $800 trillion if all global capital assets are tokenized, according to Chainlink.
Real-world asset tokenization is a significant focus for companies like Ripple Labs, Chainlink, and Algorand, seen as the next major development in cryptocurrencies, blockchain, and digital assets.
In May, the Depository Trust and Clearing Corporation (DTCC) released a report on a real-world asset tokenization pilot program with several large banks, including JP Morgan, Edward Jones, and BNY Mellon, using Chainlink’s CCIP interoperability protocol.
The pilot aimed to test fund data tokenization and simulate bringing real-world data on-chain. The DTCC report identified several blockchain tokenization benefits, such as automated data management, reduced record-keeping, transparent APIs for customers, and dynamic data management across an asset’s lifecycle.
The program provided insights into potential future applications for banks and other institutions looking to integrate blockchain tokenization into their services, including brokerage applications and automated data feeds.