Citi is reviewing its digital asset custody agreement with Metaco, which was acquired by Ripple for $250 million last month. That’s according to a Bloomberg report today.
At the time of the buyout announcement, we reached out to a few of Metaco’s banking clients to assess their reaction, but they declined to comment. Metaco is to be run independently of Ripple.
Metaco provides custody technology solutions to numerous major banks, but Citi is the main one that is headquartered in the United States. Ripple is locked in a fierce battle with the Securities and Exchange Commission (SEC) over whether the XRP crypto token is a security. The Bloomberg report said it was unclear whether the Ripple acquisition motivated the move.
Citi is a prized client for multiple reasons. It’s the worlds fourth largest custodian bank after (after BNY Mellon, State Street, JP Morgan). And it initiated the Regulated Liability Network, which aims to link central bank digital currencies with bank deposit tokens and other tokenized digital assets. A proof of concept with the New York Federal Reserve and several other banks has just concluded.
During the last two years Metaco has signed BNP Paribas Securities Services, SocGen Forge, Citi as well as German banks DekaBank and DZ Bank. By then it already had several big name clients, including DBS, BBVA and Standard Chartered’s Zodia Custody. Many of these are amongst the most active banks when it comes to tokenization.
Citi is not the only bank to review its digital asset custody partner. State Street recently parted company with Copper.
