Ripple, a provider of institutional blockchain services and developer of XRP, announced a partnership with South African bank Absa on Wednesday to offer digital asset custody to the bank’s customers.
According to the announcement, Absa is “Ripple’s first significant custody partner in Africa.” The bank will enable its customers to access digital asset custody services powered by Ripple’s technology for tokenized assets and cryptocurrencies.
This bank is a significant player in the African financial sector, managing 2.07 trillion South African rands (approximately $119.5 billion) in assets by the end of 2024. Last year, Absa reported a revenue of $6.34 billion.
Ripple states that this partnership is driven by the rising demand for secure and compliant digital asset infrastructure across emerging markets. Reece Merrick, Ripple’s managing director for the Middle East and Africa, emphasized that the collaboration “demonstrates Ripple’s commitment to unlocking the potential of digital assets in the region.”
This partnership enhances Ripple’s footprint in Africa. Earlier in March, Ripple joined forces with African payment provider Chipper Cash to facilitate crypto-enabled cross-border payments.
Last month, Ripple launched its Ripple USD (RLUSD) stablecoin in Africa, using partnerships with Chipper Cash, crypto exchange VALR, and crypto payment service Yellow Card. Ripple’s senior vice president of stablecoins, Jack McDonald, mentioned that the distribution of RLUSD in Africa has commenced through local partners.
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Ripple invests in custody
Ripple applied for a trademark related to its custody service in mid-March and has since begun onboarding institutional clients.
This service was launched about a year ago, specifically intended to function on the backend of banks and financial technology companies. Ripple’s initiative came after acquiring digital asset custodian Standard Custody last summer.
Earlier this month, Ripple collaborated with Bahrain Fintech Bay to provide its custody solution along with its RLUSD stablecoin to financial institutions in Bahrain. In September, the company secured a deal to offer crypto custody services to Spanish bank Banco Bilbao Vizcaya Argentaria.
In early August, South Korean crypto custodian BDAas introduced institutional custody for XRP following its partnership with Ripple to utilize its custody services. Ripple’s efforts in custody go back further, having partnered with HSBC late in 2023 to create an institutional custody platform for tokenized securities.
Related: DBS, Franklin Templeton, Ripple team up to launch tokenized lending
Traditional finance embraces crypto
The connection between traditional finance and the crypto landscape is increasingly strong. The crypto offerings from BlackRock, the largest asset manager globally, have significantly contributed to its robust quarterly earnings and revenue. BlackRock’s spot Bitcoin (BTC) exchange-traded fund (ETF) reportedly generated nearly $245 million in fees in the past year.
Morgan Stanley, a leading wealth management firm, has informed its financial advisers that all clients can now invest in cryptocurrency funds. BNY, the largest custodian bank globally, is also exploring tokenized deposits to facilitate instant, 24/7 fund transfers for clients.
Governments are gradually getting involved in the crypto space as well. Luxembourg’s sovereign wealth fund recently allocated 1% of its portfolio to Bitcoin ETFs, following Norway’s sovereign wealth fund, which increased its indirect Bitcoin exposure by 192% over the past year.
Other examples include the Czech National Bank boosting its investments in US crypto exchange Coinbase this summer, and a Swedish parliament member proposing a “budget-neutral” Bitcoin reserve in April. Additionally, in February, the Czech National Bank began considering a Bitcoin test portfolio, with officials suggesting it should be studied rather than feared.
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