Global Research Report on Digital Development | The Function and Significance of HSBC Hong Kong's Tokenized Deposits

Global Digital Development Research Report Volume 3 Issue 21 (2025/5/19-2025/5/25)

This issue introduces the blockchain settlement-related services launched by HSBC Hong Kong based on public information for reference.

On May 22, 2025, HSBC launched the first bank-provided tokenized deposit-based enterprise treasury management solution in Hong Kong, which serves as a local blockchain settlement service. HSBC plans to promote it to the Asian and European markets in the second half of this year, currently only available in the Hong Kong region.

1. Service Background and Launch Situation

In recent years, the application of blockchain technology in the financial sector has been continuously explored and expanded. Tokenization, as an emerging form of digital asset, has gradually attracted attention. HSBC has responded to this trend by launching a tokenized deposit service in Hong Kong, aimed at providing businesses with more efficient and convenient fund management and payment settlement solutions to enhance their competitiveness in the digital economy era.

The launch of this service is also due to the active support and promotion of financial technology by the Hong Kong Monetary Authority, as well as the favorable environment and infrastructure for financial innovation in Hong Kong as an international financial center.

2. Service Principles and Functions

HSBC's tokenized deposits are based on blockchain technology, converting corporate Hong Kong dollar or US dollar deposits into digital tokens that can be traded on the blockchain. These tokens represent the actual deposits of businesses at HSBC, holding the same asset value and rights as traditional deposits.

Between wallets held by different companies under the same enterprise, these tokens can be transferred and paid in real-time, unrestricted by traditional factors such as time and space, achieving 24/7 operation, greatly enhancing the liquidity and management efficiency of enterprise funds.

3. Service Advantages

Improve capital management efficiency. Enterprises can allocate funds more quickly, achieving instant transfers of funds between different accounts, reducing the time funds are in transit, enhancing the efficiency of fund utilization, and helping enterprises better seize investment and business opportunities.

Enhance the flexibility and convenience of payment settlement. Through tokenized transactions on the blockchain, businesses can break through the time and geographical limitations of traditional payment systems, enabling payment settlements anytime and anywhere, especially suitable for companies with frequent cross-border operations, which can effectively reduce the costs and complexities of cross-border payments.

Improve transaction transparency and security. The distributed ledger characteristics of blockchain technology ensure that all transaction records are completely and immutably recorded on the chain, allowing enterprises to query and trace the flow of funds at any time, thus enhancing the transparency and auditability of transactions. At the same time, the encryption technology and consensus mechanism of blockchain also provide higher security guarantees for transactions, reducing the risks of data leakage and fraud.

Support for integration with other digital assets and blockchain applications. Tokenized deposits, as a form of digital asset, can easily interact and integrate with other digital assets and blockchain-based financial applications, creating more innovative business models and value growth opportunities for enterprises. For example, enterprises can combine tokenized deposits with other digital financial products to achieve diversification of assets; or participate in blockchain-based supply chain finance, cross-border trade financing, and other application scenarios to expand business boundaries.

4. Application Scenarios and Cases

Internal fund allocation within enterprises. Corporate groups can utilize HSBC's tokenized deposit services to quickly and efficiently transfer funds between different subsidiaries or branches under its umbrella, achieving centralized management and optimized allocation of funds. For example, a multinational corporate group can open a tokenized deposit account at HSBC in Hong Kong, and then use the blockchain network to real-time aggregate or allocate funds for its subsidiaries in different countries and regions, improving the efficiency and effectiveness of fund usage.

Cross-border trade settlement. In cross-border trade, import and export enterprises can use tokenized deposits for payment and settlement of goods, thereby accelerating transaction speed and reducing settlement risks. When a cross-border transaction is completed, the buyer's enterprise can transfer the corresponding amount of tokenized deposits to the seller's enterprise, allowing both parties to confirm the receipt of funds in real-time, without relying on traditional settlement methods such as bank wire transfers, significantly shortening the transaction cycle.

Ant International's Case. Ant International has become the first corporate client in Hong Kong to adopt HSBC's new tokenized deposit service. By converting US dollar deposits into digital tokens on HSBC's distributed ledger system, it completed its first internal fund transfer within the group. This marks an important step for Hong Kong in promoting the integration of blockchain with traditional finance, and demonstrates the practical application value and potential of this service in actual business operations.

Other Regional Banks Similar Services

By May 2025, in addition to HSBC, the following banks around the world have launched similar tokenized deposit services or have relevant plans:

Under the coordination of the Swiss Bankers Association, UBS, Credit Suisse and ten other banks have introduced a tokenized Swiss Franc project.

Citibank launched "Citi Token Services" in April 2025, providing institutional clients with tokenized deposits and smart contract services, which have been used to demonstrate a digital solution with the same purpose as bank guarantees and letters of credit. Wells Fargo, JPMorgan Chase and others are also actively exploring the application of tokenized deposits. Since launching the JPM Coin system in 2019, JPMorgan Chase is now exploring the use of tokenized deposits to accelerate cross-border payments and settlements.

Korea's Hana Bank and Woori Bank are researching tokenized deposit-related services.

In April 2025, the European Commission passed the "emarket infrastructures Act," requiring that starting from 2026, the EU's Systemically Important Payment Systems (SIPS) will gradually replace the existing settlement currencies in large payment systems with Central Bank Digital Currency (CBDC) and tokenized deposits. Central banks such as Banque de France and Deutsche Bundesbank will build a financial ecosystem based on CBDC and tokenized deposits from commercial banks.

6. The Impact and Significance on the Financial Industry

Promoting Innovation in Banking. HSBC's tokenized deposit service provides banks with a new business model and customer service approach, helping banks expand their business areas, enhance market share, and competitiveness. At the same time, it encourages other banks to accelerate their research and exploration of blockchain technology and tokenized services, driving the digital transformation and innovative development of the entire banking industry.

Promoting the deep integration of finance and technology. The successful launch of this service is the result of close collaboration between financial institutions and technology companies, reflecting the deep application and value creation of blockchain technology in the traditional financial sector. In the future, as technology continues to advance and improve, the integration of finance and technology will become even deeper, bringing more innovative products and services to the financial industry to meet the increasingly diverse and personalized needs of customers.

Exploring the regulatory framework for digital currencies and fintech. The emergence of tokenized deposit services has also brought new challenges and issues to financial regulation, prompting regulatory agencies to strengthen their research and policy formulation on the regulation of digital currencies, blockchain technology, and related financial innovations. This aims to explore the establishment of a regulatory framework and rule system that adapts to the development of fintech, ensuring the stability of financial markets and the legitimate rights and interests of consumers. (Images in the text are generated by Doubao)