Ripple acquired Metaco and Standard Custody to enhance custodial services and integrate blockchain solutions for financial institutions.
The company aims to offer tokenization-as-a-service, enabling banks to tokenize assets like stocks and real estate.
Ripple’s strategy targets a growing $16 trillion custody market, while competing with other blockchain companies in tokenization and payments.
Ripple Labs is growing its custody infrastructure as it looks to position itself at the forefront of blockchain innovation. The company is ramping up investments, with plans to provide tokenization to global financial institutions. This move follows Ripple’s ongoing battle with the SEC, signaling its responsibility to evolve beyond its core focus on payments and stablecoin solutions.
Ripple’s Acquisition Strategy for Custodial Services
The new strategy focuses on the company's recent cryptocurrency custody acquisitions, as noted by John Deaton. The company obtained Metaco and Standard Custody in 2023 and 2024 as it expanded its presence in the industry.
https://twitter.com/JohnEDeaton1/status/1916676511639159275
By acquiring these companies, the company demonstrates its strategic plan to develop payment solutions that include custodial services. The addition of custodial services to portfolio gives the company an expanded position to serve all financial institutions that want to implement blockchain technology.
It is therefore not a coincidence that Ripple is acquiring these custody firms as argued by the lawyer John Deaton. Referring to the function of Ripple, he says that the company wants to become a one-stop-shop for the banks. As such, Ripple is proposing an integration of custody solutions, payments, and stablecoins so as to incline the banking and other related institutions towards the distributed ledger technology improvement.
Push for Tokenization-as-a-Service
As to the long-term vision, Ripple aims to offer tokenization-as-a-service for banks as well as other participants of the financial sphere. According to Deaton this is an indication that the company is positioning its self for the possibility of offering a single box where financial institutions can tokenize common assets such as stocks, real estates among others. Subsequently, this would demystify tokenization so that it becomes available to other participants in the financial market.
Ripple plans to leverage its growing custody infrastructure to achieve this. The XRP Ledger, along with the RLUSD stablecoin, is anticipated to play a key role in Ripple’s vision for tokenized assets. Tokenization could guide to greater adoption of XRP, especially if RLUSD manages to capture a substantial share of the stablecoin market.
The Competitive Landscape and Future Prospects
The strategy also comes at a time when competition in the blockchain space is intensifying. Other companies, such as Circle, have launched payment networks to provide real-time payments. Despite this, Ripple is making significant efforts to widen its lead in the custody market, which is cast to reach $16 trillion by 2030.The company demonstrates strong intentions to recover delayed progress following its drawn-out dispute with the SEC. The company dedicates more funds to tokenization systems and custodial services because it wants to establish its primacy in the fast-developing blockchain sector.
