In an exciting development for the blockchain community, Ripple has acquired Switzerland-based custodian Metaco for $250 million. This move is part of Ripple’s plan to transform the $156 trillion cross-border payment market and delve into Central Bank Digital Currencies (CBDCs) and tokenized assets. Metaco’s custody technology and services will aid Ripple in both protecting customer assets and generating an engaging new revenue stream.
While the Ripple-Metaco deal is intriguing, crypto advisory firm Architect Partners believes it’s just the beginning of more strategic acquisitions in the custody sector. This anticipation is due to a combination of regulatory and bear market factors. For instance, U.S. regulators have signaled that only registered Qualified Custodians (QCs) are allowed to custody digital and crypto-assets. However, there are currently few existing QCs.
Another factor is the operational separation of custodian services from execution activities; regulators’ suggestions lean toward this separation approach. This method is more common in how traditional finance handles equities rather than in crypto companies. Consequently, traditional finance custodians such as Northern Trust and BNY Mellon have been hesitant to enter the crypto market due to regulatory and market risks.
Nevertheless, Architect Partners expect this stance to change as new opportunities arise. This change could bring both threats and opportunities for businesses specializing in digital and crypto asset custody. The current “crypto winter” adds to the pressure on custodians by slowing or stalling the growth of assets under custody. As a result, revenues have either remained stagnant or declined. Companies must have financial staying power and conviction in the upcoming upturn to weather such a stormy market.
The Ripple-Metaco deal, alongside the expected changes in the industry, showcases an exciting time for market enthusiasts. As regulatory bodies work towards embracing digital asset custody, the blending of traditional finance and the crypto landscape appears inevitable. It’s interesting to ponder on the potential impact this could have on the sector as a whole and how new opportunities might emerge for companies that adapt quickly to changing market realities.
In conclusion, while the Ripple acquisition of Metaco signals a promising start for the blockchain community, it’s essential to stay informed about
Source: Coindesk
