Ripple has announced a deal to acquire the New York-based digital asset platform Standard Custody and Trust Company, pending regulatory approval.
Once the acquisition is finalized, Ripple will become the sole shareholder of Standard Custody, leveraging its limited-purpose trust charter and money transmitter licenses to enhance its regulatory license portfolio.
Ripple’s expansion into the US market
Ripple, known for its innovative blockchain-based payment solutions, is strategically positioning itself to further penetrate the US financial sector. The deal with Standard Custody & Trust, subject to approval from the New York Department of Financial Services, adds a crypto custody and settlement business to Ripple’s portfolio. This acquisition enables customers to maintain custody with Ripple instead of relying on external partners.
Today, we’re excited to announce that Ripple has signed a deal to acquire @StandardCustody, strengthening our product offerings and adding to our growing portfolio of regulatory licenses around the world. Learn more about our latest acquisition: https://t.co/JJp51mEabL
— Ripple (@Ripple) February 13, 2024
Despite its focus on international markets and ongoing legal disputes with the U.S. Securities and Exchange Commission (SEC), Ripple remains committed to enhancing its regulatory qualifications and operational capabilities within the country. By acquiring Standard Custody & Trust Co., a company with a New York trust charter, it aims to unlock new opportunities for growth. Ripple aims to broaden its offerings beyond its renowned payments network and venture into other financial products where institutional customers can leverage blockchain technology.
The acquisition of Standard Custody & Trust will enable Ripple to offer more in-house services, particularly to financial institutions seeking to tokenize assets. According to a spokesperson, the addition of Standard Custody’s licenses is a strategic move for Ripple, providing vital compliance capabilities to complement its blockchain technology offerings for financial institutions.
Monica Long, President of Ripple, emphasized the significance of expanding infrastructure offerings to financial institutions, stating,
“We want to offer more and more of these infrastructure pieces to these financial institutions. We see this as giving us a lot of flexibility.”
She described the acquisition as a long-term project, indicating Ripple’s ongoing efforts to complete the remainder of its U.S. money transmission licensing. Long added;
“Being able to provide not just the technology component to financial institutions that want to use blockchain…you also need a compliance piece. And so these licenses are really key to us being able to deliver that full end-to-end solution.”
Expansion of the European Custody Team and Partnerships
Despite Ripple’s legal battles with the SEC over accusations regarding XRP’s classification as a security, Long emphasized that the company’s focus on the U.S. market is driven more by regulatory uncertainty surrounding digital assets than by specific legal disputes. Long expressed optimism about the potential for the U.S. to emerge as a leader in driving innovation in the digital asset space.
Standard Custody, a subsidiary of digital asset infrastructure firm PolySign, raised $53 million in Series C funding in June 2022, underscoring its position as a significant player in the digital asset custody space. Standard Custody specializes in digital asset custody, escrow, and settlement services for institutional clients, having secured approval for a New York trust license in May 2021.
Ripple’s acquisition underscores its commitment to expanding its regulatory foothold, particularly in the U.S. and Europe. This acquisition follows its previous deal, in which it acquired another cryptocurrency custody firm, Metaco.
Notably, Ripple has been actively bolstering its European custody team and has established partnerships with prominent financial institutions across five continents. Notable clients include HSBC, DekaBank, VP Bank, and DZ Bank in Germany, along with Société Générale, BBVA Switzerland, DBS, and Zodia Custody.
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