Institutional blockchain service provider and XRP developer Ripple announced on Wednesday a partnership with South African bank Absa to provide digital asset custody services for the bank's clients.
According to the announcement, Absa is "Ripple's first major custody partner in Africa." The bank will leverage Ripple's infrastructure to offer digital asset custody services for tokenized assets and cryptocurrencies to its clients.
The bank is a significant player in the African financial landscape, managing assets worth 2.07 trillion South African Rand (approximately $119.5 billion) as of the end of 2024. Absa's revenue also reached $6.34 billion last year.
Ripple stated that this partnership is "a result of the growing demand for secure, compliant digital asset infrastructure in emerging markets." Reece Merrick, Managing Director of Ripple Middle East and Africa, noted that this partnership "demonstrates Ripple's commitment to unlocking the potential of digital assets on the African continent."
This partnership expands Ripple's influence in Africa. In late March, the company collaborated with African payment infrastructure provider Chipper Cash to support cryptocurrency cross-border payments.
Last month, Ripple introduced its Ripple USD (RLUSD) stablecoin to Africa through partnerships with Chipper Cash, cryptocurrency exchange VALR, and cryptocurrency payment service Yellow Card. Jack McDonald, Senior Vice President of Ripple Stablecoins, stated that the company has begun distributing RLUSD in Africa through local partners.
Ripple first applied for a trademark for its custody services in mid-March and subsequently began recruiting institutional clients.
The service itself was launched about a year ago, specifically designed to provide backend services for banks and fintech companies. This initiative by Ripple followed the company's acquisition of digital asset custodian Standard Custody last summer.
Earlier this month, Ripple partnered with Bahrain FinTech Bay to introduce its custody solution along with the RLUSD stablecoin to financial institutions in Bahrain. In September, the company agreed to provide cryptocurrency custody services for Spanish bank Banco Bilbao Vizcaya Argentaria.
In early August, South Korean cryptocurrency custodian BDAas launched institutional custody support for XRP after collaborating with Ripple to utilize its custody services. Ripple's custody efforts date back further, as the company launched an institutional custody platform for tokenized securities in collaboration with major bank HSBC at the end of 2023.
The ties between traditional finance and the cryptocurrency sector are becoming increasingly close. Cryptocurrency products offered by BlackRock, the world's largest asset management company, have helped the firm achieve strong quarterly earnings and revenue. Earlier this month, it was reported that BlackRock's spot Bitcoin (BTC) exchange-traded fund (ETF) generated nearly $245 million in fees over the past year.
It has been reported that Morgan Stanley, one of the world's largest wealth management firms, recently informed its financial advisors that all clients will be able to invest in cryptocurrency funds. Additionally, it has been reported that the world's largest custodian bank, BNY Mellon, is exploring tokenized deposits to enable clients to make instant transfers around the clock.
Nation-states are also slowly joining the cryptocurrency trend. Earlier this month, the Luxembourg sovereign wealth fund allocated 1% of its portfolio to a Bitcoin ETF. Previously, the Norwegian sovereign wealth fund increased 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 the American cryptocurrency exchange Coinbase this summer, while a member of the Swedish parliament proposed establishing a "budget-neutral" Bitcoin reserve in April. Finally, in February, the Czech National Bank began considering a Bitcoin test investment portfolio, with an official suggesting that it should be studied rather than feared.
Related: EU MiCA regulations come into effect, bringing unified standards and new opportunities for cryptocurrency exchanges and the industry.
Original: “Ripple partners with South African bank Absa for bank-grade cryptocurrency custody services”
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