HSBC pioneers the launch of a groundbreaking gold product, utilizing tokenization in the banking industry.

HSBC, a major banking corporation, has made history by being the first bank to release a blockchain-based real-world asset. The bank’s new tokenized gold investment product, called the Gold Token, was launched on March 28 and is aimed at retail investors in Hong Kong. HSBC customers will be able to access the token through the bank’s online banking platform and mobile application. The introduction of this product is a response to the Chinese regulator’s call for the use of digital assets by the public.

The Gold Tokens are backed by physical gold, and the ownership of the tokens will be verified on HSBC’s private blockchain called Orion. The tokens will be minted on this blockchain as well. Maggie Ng, the general manager and head of wealth and personal banking Hong Kong at HSBC, stated that the bank recognizes the increasing demand for digital assets and the familiarity of their customers with gold investments.

HSBC’s Orion platform, which was launched in 2022, is a bond tokenization platform based on distributed ledger technology (DLT). It aims to improve the efficiency, security, and flexibility of bond issuance and trading. HSBC is proud that the HSBC Gold Token, powered by HSBC Orion, is the first retail product in Hong Kong based on DLT and authorized by the Securities and Futures Commission (SFC).

Before the launch of the Gold Token, HSBC had teased a tokenized gold offering in collaboration with Metaco, a crypto safe-keeping specialist owned by Ripple. This was part of the bank’s plan for digital asset custody. The introduction of the tokenized gold product follows the SFC’s circulars in November, which urged issuers to introduce tokenized SFC-authorized investment products. The SFC believes that tokenized products can reduce operational costs and improve efficiency and transparency.

In recent times, many banks and traditional institutions have shown interest in entering the asset tokenization sector to bring real-world assets onto blockchains. In the decentralized industry, BlackRock is the latest to join this trend with the launch of its Institutional Digital Liquidity Fund for USD. HSBC continues to advance its digital currency and central bank digital currency (CBDC) pilots in Hong Kong.

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