In a groundbreaking move for the traditional banking sector, HSBC has become the first bank to issue a blockchain-backed real-world asset with the introduction of its new tokenized gold investment product. The HSBC Gold Token, which went live on March 28, is now available to the bank’s customers in Hong Kong through its online banking platform and mobile application.
Targeting retail investors, the Gold Token marks a significant milestone in HSBC’s embrace of digital assets and blockchain technology. The tokenized product is backed by physical gold, with proof of ownership verified on the bank’s proprietary private blockchain platform, Orion. The tokens themselves will be minted on this blockchain, providing a secure and transparent way for investors to gain exposure to the precious metal.
“We acknowledge the rising demand for digital assets and the existing familiarity of our customers with gold investment,” said Maggie Ng, General Manager and Head of Wealth and Personal Banking Hong Kong at HSBC, in a statement. “We are proud that HSBC Gold Token, powered by HSBC Orion, is the first retail product in Hong Kong that is based on distributed ledger technology, as authorized by the Securities and Futures Commission (SFC).”
The launch of the HSBC Gold Token is a direct response to the Chinese regulator’s push for the introduction of digital assets for public use. In November, the Hong Kong Securities and Futures Commission (SFC) issued circulars urging issuers to introduce tokenized SFC-authorized investment products, recognizing the potential for tokenized assets to reduce operational costs while enhancing efficiency and transparency.
HSBC’s Orion platform, launched in 2022, is a distributed ledger technology (DLT)-based bond tokenization platform designed to streamline the issuance and trading of bonds. The bank’s foray into tokenized gold marks a significant expansion of its digital asset offerings, catering to the growing demand for innovative investment products in the region.
Prior to the launch of the Gold Token, HSBC had teased a tokenized gold offering in collaboration with Ripple-owned crypto safe-keeping specialist Metaco, as part of the bank’s new digital asset custody plan. This move signaled HSBC’s commitment to exploring the potential of blockchain technology and digital assets within the traditional financial sector.
As the adoption of tokenized assets gains momentum, several banks and traditional institutions have been eyeing entry into this space, aiming to introduce real-world assets onto blockchains. HSBC’s pioneering step with the Gold Token positions the banking giant as a frontrunner in the tokenization of traditional assets, offering retail investors a new avenue to gain exposure to precious metals through innovative digital solutions.
