- Ripple is offering new features to its ‘crypto custody’ services for banks and fintechs worldwide.
- Custody services help safeguard digital assets, with the market expected to grow at a CAGR of 20.7% by 2028.
- Ripple’s expanded services could influence its regulatory battles with the SEC and promote digital asset adoption among financial institutions.
U.S. blockchain startup Ripple continues expanding crypto services to traditional financial firms. Recently, the company announced that it will now offer new features to its ‘crypto custody’ services to banks and fintechs all around the world.
In finance ‘custody’ refers to the practice by institutions of safeguarding and third-party storing assets. In other words, financial institutions like banks offer clients the opportunity to store funds or other valuable items in a safer and insured way.
As Ripple improves its custody services to the market – this development could have significant implications in the future. For starters, crypto custody services are down to have a significant impact on affecting the safety and security of digital assets. Also, custody services coming from one of the most recognizable blockchain firms in the world could help push ownership of more crypto assets by financial institutions.
The service consists of connecting banks to their funds via an API interface, allowing bank management systems to interact with their funds without compromising security.
According to the company’s official website, cryptocurrency custody is one of the most rapidly increasing fields of digital finance. GlobalMarketEstimates data supports that scenario, as it predicts that the worldwide cryptocurrency custodial services market will increase at a CAGR (compound annual growth rate) of 20.7% by 2028.
Ripple Custody introduces several new features and functionalities:
- AWS CloudHSM: Ripple Custody simplifies the onboarding and deployment experience by allowing customers to use HSM on their preferred cloud provider.
- Pre-configured Operational and Policy Frameworks: Deploy pre-configured operational and policy frameworks with added features to simplify the selection, deployment, maintenance, and use of the Ripple Custody platform.
- XRPL Integration: Integrate fungible XRPL tokens, creating new opportunities for digital asset representation and liquidity. With support for the native DEX on XRPL, companies can seamlessly trade assets with minimal fees.
- Compliance Integrations: New integration with Elliptic for transaction screening services helps customers monitor transactions in real time, better assess risks, and make decisions based on defined risk policies to meet regulatory requirements and build trust. Ripple will support additional compliance services in the future.
- Improved UI and Usability: Offering an updated and more intuitive user interface. Integrations with external identity providers allow users to log in via their preferred OAuth or OIDC-based systems, providing greater flexibility and convenience for enterprise customers.
Regulatory Implications
This expansion into custodial services could prove beneficial for the company regarding its regulatory battles with the SEC. Ripple’s commitment to a safer space for cryptocurrency clients as well as its initiative to offer these services under government-regulatory guidelines could help in solidifying its position as a compliant and innovative leader in the crypto industry.
But more importantly – the fact that these services are directly aimed at financial institutions and other FinTechs could also prove useful as it incentivizes the distribution of cryptocurrencies to ‘traditional’ businesses that would likely not venture into DeFi otherwise.
Although custodial services are likely to not aid Ripple’s case against the SEC about proving XRP is not a security, the company’s expansion and commitment to distributing digital currency services is enhancing its credibility among financial institutions.
