HSBC launched Hong Kong's first blockchain settlement service, enabling instant money transfers via digital tokens. The service converts regular bank deposits into digital tokens, allowing companies to move funds almost instantly. According to HSBC, this initiative aims to reduce costs and accelerate payment processing compared to traditional systems.
The new tokenized deposit program allows firms to exchange regular deposits for tokens on a blockchain platform. Companies retain their funds on HSBC's balance sheet while benefiting from the speed and transparency of blockchain transactions. Ant International, an affiliate of Alibaba Group Holding, piloted the system in May using its Whale platform to facilitate instant fund transfers.
The service operates 24/7, enabling corporate clients to send Hong Kong and US dollars between HSBC Hong Kong wallets at any time. Backed by the Hong Kong Monetary Authority's Supervisory Incubator for Distributed Ledger Technology, HSBC plans to expand the service to Asian and European markets in the second half of 2025. This initiative may transform corporate cash management by providing real-time liquidity and payment tracking.
HSBC is one of six firms experimenting with tokenized money for digital asset deals under the HKMA's testing regime, established in August. The bank is also the largest in Europe in terms of assets, according to S&P Global Market Intelligence. The adoption of blockchain technology aims to bridge traditional banking with blockchain, enhancing transparency and efficiency in treasury operations.
While the project offers benefits like reduced fees and faster payments, challenges remain. Firms need to update their back-offices to interact with tokens, and blockchain platforms must maintain robust security against intrusions and technical issues.
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