HSBC Allegedly Partners with Cryptocurrency Custody Company Fireblocks

• Fireblocks has been the preferred custody technology provider for BNY Mellon and BNP Paribas.
• Uncertainty regarding regulations surrounding cryptocurrencies has dampened major banks’ enthusiasm for the sector.

According to two sources familiar with the matter, HSBC, one of the leading global banks, is partnering with the crypto custody technology firm Fireblocks.

Prior to this collaboration, Fireblocks had already established a reputation for working with significant institutions due to its proficiency in crypto custody technologies such as multi-party computation (MPC). Since early 2021, Fireblocks has served as the preferred custody technology provider for BNY Mellon and BNP Paribas.

Still Cautious About Cryptocurrencies

The uncertainty surrounding cryptocurrency regulations has lessened major banks’ enthusiasm for the digital asset space. This is largely attributed to the ongoing legal disputes between cryptocurrency companies and U.S. regulators. This lack of clarity is reportedly allowing foreign financial institutions to gain an advantage over their American counterparts.

In June, it was reported that HSBC, which oversees more than $3 trillion in assets, began offering bitcoin and ether ETFs to clients at its Hong Kong branch.

However, the bank remains cautious regarding cryptocurrencies, at least publicly; in July, Hang Seng Bank, which is owned by HSBC and also based in Hong Kong, announced that licensed crypto firms could open a bank account, but only a “simple” one.

Conversely, Franklin Templeton, one of the largest investment firms globally, has filed an application with the U.S. SEC for a spot Bitcoin exchange-traded fund. This new financial product, referred to as the “Franklin Bitcoin ETF,” could signal the next stage of institutional participation in the cryptocurrency market.

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