Banking giant HSBC has made history by becoming the first bank to introduce a blockchain-based real-world asset with the launch of its innovative tokenized gold investment product. The bank’s Gold Token was officially launched on March 28, targeting retail investors in Hong Kong. This new product is now available for HSBC customers on the bank’s online banking platform and mobile application.

According to HSBC, this launch is in response to the Chinese regulator’s initiative to introduce digital assets for public use. The gold tokens are backed by physical gold, and the proof of ownership is verified on the bank’s private blockchain named Orion, where the tokens are minted.

Maggie Ng, the general manager and head of wealth and personal banking Hong Kong at HSBC, stated, “We acknowledge the rising demand for digital assets and the existing familiarity of our customers with gold investment.”

HSBC Orion, launched in 2022, is a DLT-based bond tokenization platform developed by HSBC to enhance the efficiency, security, and flexibility of bond issuance and trading. The HSBC Gold Token, powered by HSBC Orion, is the first retail product in Hong Kong based on distributed ledger technology and authorized by the Securities and Futures Commission (SFC).

Prior to this launch, HSBC had hinted at a tokenized gold offering in collaboration with Ripple-owned crypto safe-keeping specialist Metaco as part of the bank’s digital asset custody plan. The introduction of this tokenized gold product aligns with the SFC’s November circulars urging issuers to introduce tokenized SFC-authorized investment products.

The SFC believes that tokenized products can reduce operational costs, enhance efficiency, and transparency. As more banks and traditional institutions eye entry into the asset tokenization sector, the industry is witnessing a trend of introducing real-world assets onto blockchains. Recently, BlackRock joined this trend with the launch of its Institutional Digital Liquidity Fund for USD.

HSBC is set to further advance digital currency and CBDC pilots in Hong Kong, marking a significant step towards embracing the future of finance and investing.

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