On Wednesday, March 26, the giant financial institution HSBC launched tokenized gold for retail clients. The HSBC confirmed that Hong Kong users will access the newly launched tokenized gold. 

While launching the new product, HSBC argued that the tokenized gold demonstrated the bank’s commitment to creating a digital version of real-world assets (RWA).

HSBC Gold Token Goes Public

With the dynamism in the financial sector, the government has advised financial institutions to develop more digital copies of RWA to meet the user’s diverse needs. Driven by the company’s goal of nurturing progress and growth, the London-based financial institution invested in developing the HSBC Gold Token. 

The bank confirmed that the new gold token would be available on mobile applications and online lending platforms. In the preliminary development of the gold tokens, the HSBC team leveraged its vast expertise and resources to create a digital version of the physical gold. This development was ranked as the first retail product issued by HSBC.

A statement from the general manager at HSBC Hong Kong, Maggie Ng, demonstrated that the increased demand for digital assets challenged the bank to develop the gold token.

The official confessed that HSBC users have shown interest in gold investments. Reflecting on the performance of tokenized gold on CoinGecko, this product reached US $1 billion value last year. This implies that the popularity of tokenized gold has been on the rise.

Hong Kong Push for Tokenization of Assets

In her statement, Maggie recognized the exemplary work done by the bank to launch the first retail product in Hong Kong. The executive stated that the bank lending digital asset arm HSBC Orion will support the HSBC Gold Token. 

She applauded the team behind the gold token for positioning the product on the blockchain network. Guided by the existing compliance embraced by the bank, Ng admitted that the Hong Kong Securities and Futures Commission (SFC) approved the HSBC gold token. 

Launching the tokenized gold comes months after the SFC issued new directives on tokenized products for public use. In the submission, the SFC described the tokenized assets as digital products of distributed ledger technology.

Compared to the physical products, the financial regulators noted that the tokenized products are issued directly to the customers. The development of a digital version of RWA aims to reduce operational costs and improve these assets’ efficiency and transparency. 

Benefits of Tokenized Assets

In a subsequent report, the head of investment and wealth at HSBC Hong Kong, Sami Abouzahr, explained the significance of tokenizing assets. The official believes tokenized assets are more convenient, reliable, and cost-effective. 

Mr. Abouzahr anticipated the HSBC gold token to offer user-wide access to RWA and financial assets. The executive confessed that the gold token will be among the retail products issued by HSBC Orion. 

Initially, the HSBC Orion was mandated to support the tokenization of physical gold targeting institutional clients in London. The successful tokenization of assets enabled HSBC Orion to develop the digital version of green bonds for Hong Kong users.

Addressing the Milken Institute Global Investors’ Symposium on March 26, the chief digital officer at HSBC, Bojan Obradović, stated that blockchain technology has massive potential to redefine the future financial market. 

The official confessed that the bank plans to invest heavily in distributed ledger technology. Obradović believes that blockchain technology enables companies to spot assets that can be developed as digital products. He expects HSBC to tokenize RWA, funds, and bond assets.

HSBC Vows to Support CBDC

The official confessed that HSBC plans to actively work with the Hong Kong Monetary Authority (HKMA) to develop the central bank digital currency (CBDC) for retail and wholesale use. In the meantime, the HSBC Orion will continue to tokenize deposits and conduct extensive studies on stablecoins. 

Obradović recognized the efforts made by the government to support the growth of the digital sector. With the ongoing development in the financial industry, Obradović anticipates Hong Kong to become one of the leading digital assets hubs in the world. 

Editorial credit: terry bouch / Shutterstock.com

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