HSBC Makes History with Launch of First Bank-issued Tokenized Gold Product

Banking behemoth HSBC has achieved a significant milestone by introducing a blockchain-based real-world asset with the debut of its latest tokenized gold investment offering.

Catering to retail investors in Hong Kong, the bank's Gold Token officially launched on March 28, making it accessible to HSBC customers via the institution's online banking platform and mobile application.

This groundbreaking product marks HSBC's inaugural foray into retail offerings, spurred by regulatory initiatives in China urging the adoption of digital assets for public use.

True to its name, the gold tokens are backed by physical gold, with ownership proof verified on HSBC's proprietary private blockchain known as Orion, where the tokens will also be minted.

Maggie Ng, General Manager and Head of Wealth and Personal Banking Hong Kong at HSBC, emphasized the institution's recognition of the growing demand for digital assets, coupled with customers' existing familiarity with gold investment.

Introduced in 2022, HSBC Orion is a distributed ledger technology (DLT)-based bond tokenization platform developed by the bank to bolster the efficiency, security, and flexibility of bond issuance and trading.

Ng further highlighted the significance of HSBC Gold Token, powered by HSBC Orion, as the first retail product in Hong Kong based on distributed ledger technology, authorized by the Securities and Futures Commission (SFC).

Prior to this groundbreaking launch, HSBC had hinted at a tokenized gold offering in collaboration with Metaco, a crypto safekeeping specialist owned by Ripple, as part of its digital asset custody strategy.

The introduction of the tokenized gold product aligns with the directives set forth by the Hong Kong Securities and Futures Commission (SFC) in November circulars, urging issuers to introduce tokenized SFC-authorized investment products.

The SFC views tokenized products as a means to reduce operational costs, enhance efficiency, and foster transparency, as noted in one of the circulars, emphasizing the importance of meeting all applicable product authorization requirements and implementing additional safeguards to address new risks associated with tokenization arrangements.

In recent times, several banks and traditional institutions have expressed interest in venturing into the asset tokenization sector to bring real-world assets (RWA) onto blockchains. In the decentralized industry, BlackRock has joined this trend with the launch of its Institutional Digital Liquidity Fund for USD.