Ripple Introduces Crypto Vaults for Banks, Expanding Custody Services

Ripple Labs has unveiled its new Crypto Vaults service, aimed at providing secure cryptocurrency custody solutions for banks. This service is part of a broader initiative to offer custody services to financial institutions, and the announcement has already boosted XRP's price slightly. Ripple’s move reflects its ambition to roll out a comprehensive product line targeting banks and other financial institutions.

In 2023, Ripple expanded its business by launching Ripple Custody, a brand offering custody services for digital assets. Through Crypto Vaults, Ripple integrates the XRP Ledger, allowing clients to select from various preset options to ensure proper cryptocurrency management. Along with this, Ripple has introduced a new user interface designed to make it easier for institutional clients to use Ripple Custody.

For Ripple, integrating custody services is the logical next step. The company has long been focused on serving institutional clients, with XRP playing a crucial role as an intermediary for international payments processed through RippleNet.

The Growing Appeal of Crypto Custody for Ripple

According to CNBC, crypto custody services are poised to become a lucrative business for Ripple. The Boston Consulting Group estimates that the cryptocurrency custody industry could be worth $16 trillion by 2030.

Currently, cryptocurrency exchanges like Coinbase and Gemini dominate the custody landscape. Coinbase, for instance, has a partnership with BlackRock, and all Bitcoin (BTC) acquired through BlackRock’s popular iShares Bitcoin Trust is held by Coinbase. For this ETF alone, Coinbase currently holds 370,000 BTC, valued at $23 billion. Ripple, too, has forged significant partnerships that offer vast growth potential.

Over the past year, Ripple Custody has seen a remarkable 250% growth. With partnerships with major financial players such as HSBC, Societe Generale, BBVA, and DBS, Ripple’s success in this new venture could continue to climb.

To solidify its presence in the crypto custody space, Ripple has already acquired two companies—Metaco and Standard Custody & Trust Company—both of which were previously active in the sector.

Ripple remains embroiled in a long-running legal battle with the U.S. Securities and Exchange Commission (SEC). Though the conflict appeared to be resolved in August, the SEC appealed a ruling from July 2023 in early October.

In the original ruling, a U.S. judge determined that XRP, the cryptocurrency issued by Ripple, could not be classified as an illegal security in the U.S. However, the ongoing legal battle with the SEC continues to be a hindrance for Ripple’s business expansion.