Institutional blockchain service provider and XRP developer Ripple on Wednesday announced a partnership with South African bank Absa to provide digital asset custody to institutional customers.
According to the announcement, Absa will be “Ripple’s first major custodial partner in Africa.” The bank plans to offer its customers digital asset custody services that rely on Ripple’s infrastructure for tokenized assets and cryptocurrencies.
The bank in question is a major player in Africa’s financial world, with assets under management of 2.7 trillion South African rand ($119.5 billion) at the end of 2024. Absa also had revenue of $6.34 billion last year.
Ripple explains that the partnership is “a result of the growing demand for secure and compliant digital asset infrastructure across emerging markets.” Reese Merrick, Ripple’s managing director for the Middle East and Africa, said the partnership “underlines 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 introduced its Ripple USD (RLUSD) stablecoin to Africa, leveraging a partnership with Chipper Cash, cryptocurrency exchange VALR, and crypto payment service Yellow Card. Jack MacDonald, Ripple’s senior vice president of stablecoins, said the company has begun distributing RLUSD in Africa through local partners.
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Ripple stakes custody
Ripple first applied for a trademark specifically for its custody services in mid-March and has since started registering financial institutions as customers.
The service itself was launched about a year ago and was explicitly aimed at serving banks and financial technology companies on the backend. Ripple’s move follows the company’s acquisition of digital asset management company Standard Custody last summer.
Earlier this month, Ripple partnered with Bahrain Fintech Bay to offer its custody solution to Bahraini financial institutions along with the RLUSD stablecoin. In September, the company agreed to provide crypto custody services to Spanish bank Banco Bilbao Vizcaya Argentaria.
In early August, South Korean cryptocurrency custody company BDAas began institutional custody support for XRP following a partnership with Ripple to leverage its custody services. Ripple’s commitment to custody goes back much further than that, with the company partnering with banking giant HSBC in late 2023 to launch an institutional custody platform for tokenized securities.
Related: DBS, Franklin Templeton, and Ripple partner to launch tokenized financing
Traditional finance also wants to enter virtual currency
The worlds of traditional finance and cryptocurrencies are becoming increasingly intertwined. Crypto products offered by BlackRock, the world’s largest asset manager, have helped the asset manager achieve strong quarterly profits and revenues. Earlier this month, it was reported that BlackRock’s Spot Bitcoin (BTC) exchange-traded fund (ETF) also earned nearly $245 million in fees over the past year.
Morgan Stanley, one of the world’s largest asset management companies, reportedly recently notified financial advisors that all clients will be able to invest in crypto funds. BNY, the world’s largest custodian bank, is reportedly considering tokenized deposits to allow customers to transfer funds instantly 24/7.
Nation-states are also gradually getting on board with the cryptocurrency trend. Earlier this month, Luxembourg’s sovereign wealth fund allocated 1% of its portfolio to Bitcoin ETFs. This follows Norway’s sovereign wealth fund increasing its indirect Bitcoin exposure by 192% over the past year.
That’s not the only case. The Czech National Bank increased its holdings in U.S. cryptocurrency exchange Coinbase this summer, and Swedish parliamentarians proposed a “budget-neutral” Bitcoin reserve in April. Finally, in February, the Czech National Bank began considering a test portfolio of Bitcoin, suggesting that officials should study it, not fear it.
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