Institutional blockchain services provider and XRP developer Ripple on Wednesday announced a partnership with South African bank Absa to provide digital asset custody to institutional clients.
according to AnnouncementAbsa is “Ripple’s first major custody partner in Africa.” The bank will provide digital asset custody services to its clients relying on Ripple’s infrastructure for tokenized assets and cryptocurrencies.
The bank in question is a major player on the African financial platform, management Assets worth 2.07 trillion South African rand ($119.5 billion) by the end of 2024. Absa also saw revenues of $6.34 billion last year.
Ripple explains that the partnership is “a result of the growing demand for secure, compliant digital asset infrastructure in emerging markets.” Reece Merrick, Ripple’s managing director for the Middle East and Africa, said the partnership “underscores Ripple’s commitment to unlocking the potential of digital assets on the continent.”
This partnership expands Ripple’s presence in Africa. In late March, the company partnered with African payments infrastructure provider Chipper Cash to support crypto-enabled cross-border payments.
Last month, Ripple Pur: Its Ripple USD (RLUSD) stablecoin for Africa is leveraging partnerships with Chipper Cash, crypto exchange VALR and crypto payments service Yellow Card. Jack MacDonald, Ripple’s senior vice president of stablecoins, said the company has begun RLUSD distribution in Africa through its local partners.
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Ripple bets on custody
Ripple first applied for a trademark dedicated to its custody service in mid-March and has since started adding institutions as clients.
The service was launched about a year ago with the express aim of providing last mile service to banks and financial technology firms. This move by Ripple comes after the company acquired digital asset custodian Standard Custody last summer.
Earlier this month, Ripple partnered with Bahrain Fintech Bay to bring its RLUSD stablecoin as well as its custody solution to Bahrain’s financial institutions. In September, the company agreed to provide crypto custody services to Spanish bank Banco Bilbao Vizcaya Argentaria.
In early August, South Korean crypto custodian BDaaS launched institutional custody support for XRP after partnering with Ripple to leverage its custody services. Ripple’s custody efforts date back much further than that, with the company partnering with major bank HSBC in late 2023 to launch an institutional custody platform for tokenized securities.
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Traditional finance also wants to get involved in crypto
The traditional finance and crypto landscapes are increasingly connecting. Crypto products offered by BlackRock, the world’s largest asset manager, have helped the asset manager post a strong quarter of earnings and revenue. Earlier this month, BlackRock’s spot Bitcoin (BTC) exchange-traded fund (ETF) earned nearly $245 million in fees in the past year.
Morgan Stanley, one of the world’s largest wealth managers, recently informed its financial advisors that all clients will be able to invest in cryptocurrency funds. BNY, the world’s largest custodian bank, is reportedly exploring tokenized deposits to enable customers to instantly transfer funds 24/7.
Nation-states are also slowly jumping on the crypto bandwagon. Earlier this month, Luxembourg’s sovereign wealth fund allocated 1% of its portfolio to a Bitcoin ETF. This follows Norway’s sovereign wealth fund increasing its indirect Bitcoin exposure by 192% over the past year.
These are not the only such cases. The Czech National Bank increased its stake in US crypto exchange Coinbase this summer, while a member of the Swedish parliament proposed a “budget-neutral” Bitcoin reserve in April. Finally, in February, the Czech National Bank began considering a Bitcoin test portfolio and one official suggested it should be studied rather than feared.
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