In May 2025 HSBC launched its Tokenized Deposit Service (TDS) on its private blockchain, HSBC Orion, which uses Canton distributed ledger technology (DLT). Now the most internationally active systemically important bank (G-SIB) has completed a simulated pilot of tokenized deposits on the public Canton Network, marking the first time TDS was issued on a public blockchain. The pilot enabled the exchange of deposits for other digital assets on the network, achieving atomic settlement. Later in the day it revealed its TDS service is now available in the US.
The Canton Network is attracting other major financial infrastructure players. The DTCC has previously confirmed it is the first public DLT that it plans to use for deploying tokenized Treasuries.
The appeal of the Canton Network is its configurable privacy, meaning the details of transactions need not be publicly visible. Additionally, governance and the ability to operate validators is more tightly controlled. A couple of weeks ago, an X post revealed that HSBC had applied to become a validator on the network. The Canton Foundation did not respond to a request for comment, nor confirm whether its governance forum is publicly accessible. Notably, while Canton describes itself as permissionless despite a curated set of super validators, HSBC did not use the term in the body of its announcement. For banks, permissionless is a double edged sword because of the Basel framework’s current capital treatment for exposures on permissionless chains, which may be a reason why the pilot was a simulation. The Basel Committee is reviewing those rules.
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