HSBC Unveils Tokenized Gold Targeting Hong Kong-based Retail Customers
HSBC is responding positively to the Hong Kong government’s call for public access to digital assets by unveiling tokenized gold products. The investment bank is availing HSBC Gold Token accessible on its mobile application and online banking platform.
HSBC is the first to unveil the gold token as a retail product bank targeting end investors for distribution and trading by intermediaries. HSBC leverages the capacity to record the tokenized products on the blockchain digitally.
HSBC Unveils Tokenized Gold to Retail Clients
The unveiling of the tokenized gold to the retail clients constitutes the bank’s push and compliance with the government directive to avail real-world assets digitally. The tokenized gold involves the physical gold whose ownership rights are digitally preserved on the blockchain.
The HSBC wealth and personal banking manager, Maggie Ng, admitted that the new product aligns with the demand for digital assets and its clients’ familiarity with gold investment.
The tokenized gold assets have existed with the data aggregation platform CoinGecko, indicating their global value surpassed US$1 billion last year.
Ng confirmed that the HSBC Gold Token is leveraging the bank’s digital assets platform – HSBC Orion, and the distributed ledger technology. The banking executive admitted that the tokenized gold product issuance is possible following authorization by the Securities and Futures Commission (SFC).
The HSBC Gold Token came after the market regulator in Hong Kong issued a pair of circulars in November last year classifying the requirements for issuing tokenized products and assets offerable to the public. The tokenized products harbor the potential to lower operational costs while promoting efficiency and transparency.
Sami Abouzahr heads investments and wealth solutions and hailed the HSBC Gold token as illustrative of convenience, affordability, and broader access to the real world and financial assets via tokenization. The HSBC Gold Token is a constituent of the planned retail products that will leverage the HSBC Orion.
The HSBC Orion’s use in the past involved facilitating the tokenization of physical gold in London and targeting institutional investors. Also, the platform helped launch the digital green bonds within Hong Kong.
Blockchain-Powered Orion Shortens Issuance Settlement Period
February saw the HSBC Orion help the Hong Kong government execute the world’s first multicurrency digital bond valued at US$750 million. The bond issuance utilized the platform’s private blockchain being a constituent of the Central Money Markets Unit (CMU) under the Hong Kong Monetary Authority (HKMA).
The blockchain-powered platform shortens the issuance settlement period to 24 hours from five days. The HSBC hails it as easing coupon payments and trade settlements within the secondary market.
The HKMA’s deputy executive, Darryl Chan, addressed the International Capital Market Association event on Tuesday, March 26, that investors could have utilized the usual market infrastructure. Previously, investors could use the five-day process to leverage the CMU in Hong Kong and clear houses.
Chan observes that the blockchain-powered platform broadened the bond’s investors’ base, thus enhancing the liquidity. The HKMA executive hailed the issuance as bringing the tokenized bonds beyond the proof-of-concept, bringing it closer to realizing common applications.
Elsewhere, HSBC chief digital executive Bojan Obradović reiterated during Tuesday’s Milken Institute Global Investors Symposium that the blockchain ledger harbors the untapped potential to become the mainstream component of financial markets in the future.
HSBC Commits to HKMA CBDC and Stablecoins Initiative
Obradović affirmed HSBC’s commitment to investing in distributed ledger technology. He disclosed advanced plans to identify assets that HSBC will develop into digital products – whether funds, bonds, or tokenizing real-world assets.
Obradović revealed that HSBC will continue its engagement with the HKMA, particularly in the central bank digital currency (CBDC) targeted for rollout at wholesale and retail levels. Also, HSBC will proceed with the tokenized deposits and stablecoins research.
Obradović noted the government’s devotion to formulating a regulatory framework to guide selling stablecoins to retail investors. He said that Hong Kong is edging closer to becoming the global leading digital asset hub.
Obradović added that the real opportunity lies in bringing buy and sell-sides to Hong Kong backed by actual transactions that yield economic value.
Editorial credit: Steve Heap / Shutterstock.com
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