HSBC Launches Gold Token Service for Retail Investors in Hong Kong

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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March 26, 2024

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Banking giant HSBC is now allowing retail investors in Hong Kong to buy real gold through digital tokens.

HSBC’s new gold investment is available through the bank’s online banking service and app, it said Wednesday.

It’s the first time HSBC has used its private distributed ledger for everyday investors. To power the gold token, the bank is using its digital assets platform Orion. This platform facilitates the issuance and storage of digital assets like bonds.

The introduction of the HSBC Gold Token marks the initiation of retail products driven by the Orion platform. This system generates digital tokens representing actual gold bars, enabling their trade through HSBC’s single-dealer platform.

HSBC’s Orion Platform Facilitates Retail Gold Token Launch

The bank previously used Orion to launch digital bonds in Hong Kong and Luxembourg, and to tokenize physical gold in London for institutional investors.

“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 authorised by the Securities and Futures Commission,” HSBC general manager Maggie Ng said in a statement.

“We acknowledge the rising demand for digital assets and the existing familiarity of our customers with gold investment,” she added.

The Rise of Tokenization in Financial Markets

Tokenization refers to creating digital representations of real-world assets (RWA) on a blockchain. These digital tokens function as verifiable records of ownership or value associated with the underlying asset, such as stocks, property, or even precious metals.

The conversion of RWA into digital tokens on a blockchain has emerged as a dominant trend within established financial institutions. This development follows Boston Consulting Group’s prediction in late 2022, projecting that the value of tokenized assets could reach a staggering $16t within the next decade.

This prediction may have initially appeared unrealistic to some. But, recent actions of major institutions suggest a growing acceptance and potential for this financial technology.

By the close of 2023, the landscape demonstrably shifted. Major institutions, including HSBC and Deutsche Bank, had actively begun preparing to offer custody services for tokenized assets to their clientele.