C - Ripple acquires Swiss crypto custody company Metaco

2023-05-17 08:55:41 ET

Blockchain and crypto company Ripple has acquired Swiss startup Metaco to expand into digital asset custody and tokenization technology as well broaden its geographical reach, the company said Wednesday.

With the acquisition, Ripple is seeking to capitalize on increasing demand for institutional cryptocurrency custody services. The institutional crypto custody market is expected to reach $10T by 2030, it said. "Recent research conducted by Ripple shows that most global finance leaders at financial institutions and enterprises have plans to use crypto custody solutions in their business within the next three years — primarily through a third-party provider."

Ripple CEO Brad Garlinghouse told CNBC that the company used $250M of cash from its balance sheet to fund the acquisition.

Metaco provides custody infrastructure for institutions to scale new business models in the crypto economy. Its technology offerings are currently available in Switzerland, Germany, Turkey, France, the U.K., the  U.S., Singapore, Hong Kong, and the Philippines, among other jurisdictions.

Last year, BNP Paribas ( OTCQX:BNPQF ) teamed up with Metaco to offer crypto custody services to its clients. Other Metaco clients include Societe Generale ( OTCPK:SCGLF ) and Citigroup ( C ).

Ripple, associated with the XRP ( XRP-USD ) token, uses blockchain and cryptocurrency for use in such areas as cross-border payments, central bank digital currencies, liquidity management, and tokenization. "Enabling customers to custody, issue and settle these tokenized assets is a natural next step in both the company’s and the industry’s evolution," the company said .

The acquisition comes even as regulatory issues hang over the crypto sector. Ripple Labs said it expects to spend $200M fighting a lawsuit filed by the U.S. Securities and Exchange Commission. The SEC contends that XRP is a security, while Ripple considers it to be a currency. The SEC filed the lawsuit in December 2020.

More on the Crypto Clampdown:

• European Union gives final approval for sweeping cryptocurrency legislation
• SEC asks court to reject Coinbase petition on crypto rulemaking
• Binance to exit Canada due to stiffer rules
• Ex-Coinbase manager ordered to spend two years in prison for insider trading

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