HSBC digs deeper into crypto with Fireblocks partnership

HSBC, a London-based global bank with approximately $3 trillion in assets, is reportedly collaborating with cryptocurrency custody tech firm Fireblocks.

HSBC, which serves 40 million customers across 64 countries and territories, offers its customers in Hong Kong the ability to trade Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs). Despite this offering, the banking giant maintains a cautious public stance on cryptocurrencies, as evidenced by recent restrictions imposed by its subsidiary Hang Seng Bank in Hong Kong on licensed crypto companies.

By tapping into Fireblocks’ technology, crypto service firms can elevate their custody services to an enterprise-grade level, ensuring utmost security and governance standards. The integration also grants partners access to Fireblocks’ extensive network, facilitating direct connectivity to liquidity providers.

Additionally, Fireblocks offers a modular and scalable infrastructure that streamlines settlement processes, fortify operational security, and minimize manual errors.

Fireblocks’ secure network also enables financial firms to safely transfer digital assets between exchanges, custodians, counterparties and other portfolios, while expanding its reach to hundreds of institutional participants.

With the Fireblocks network, users are able to find and connect with some of the largest crypto and financial institutions without taking counterparty risk. Over 400 participants are already active on the network, including banks, OTCs, asset managers, liquidity providers, exchanges, lending desks, brokers, market makers, clearinghouses, and custodians.

HSBC Hong Kong, a division of the Hong Kong and Shanghai Banking Corporation, introduced its inaugural cryptocurrency offerings back in June. This move makes the UK-headquartered banking giant the first lender in Hong Kong to allow its customers to buy crypto-derivative products.

The bank provides cryptocurrency ETFs that are listed on the Hong Kong Exchange (HKEX), which currently features three investment vehicles: the CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF, and Samsung Bitcoin Futures Active ETF.

This strategic move by HSBC aims to enhance the exposure of cryptocurrencies among its local clientele in Hong Kong. As of March 2022, the lender reportedly boasted approximately 1.7 million active mobile customers, with nearly 95% of its retail transactions conducted online.

Apart from these novel cryptocurrency services, HSBC has reportedly established the Virtual Asset Investor Education Center. This initiative seeks to educate and safeguard investors against the risks associated with cryptocurrencies.

Accessible through various virtual asset-related products such as the HSBC HK Easy Invest app, HSBC HK Mobile Banking app, and online banking platform, this education center serves as an additional resource for investors. Before customers can begin investing, they must read and acknowledge educational materials and risk disclosures.