Capital markets News

HSBC makes tokenized gold available to Hong Kong retail clients

hsbc gold token

Last November HSBC revealed the first institutional trades of tokenized gold, where the physical gold is stored in HSBC’s London vault. Today the bank announced that retail investors can now access the tokens in Hong Kong via online banking and the website. While it’s not the first bank to target consumers with tokenized gold, it is certainly the largest.

When it launched the institutional offering, it said it would extend it to retail depending on local regulations. In this case, the offering was approved by Hong Kong’s Securities and Futures Commission (SFC), which released advice about tokenization in November.

“We acknowledge the rising demand for digital assets and the existing familiarity of our customers with gold investment,” said Maggie Ng, general manager and head of wealth and personal banking Hong Kong at HSBC, as reported by the South China Morning Post.

The tokens are issued via HSBC Orion, the tokenization platform used for issuing the $750m plus Hong Kong green bond.

Tokenized gold initiatives

Tokenized gold issued by crypto firms has already surpassed $1 billion in issuance, with Tether as the largest token issuer with a market capitalization of more than $500 million. Paxos Trust is the second largest issuer, with almost $400 million.

Meanwhile, other banks to tokenize gold include Russian state-controlled bank Sber. Russia recently passed laws to enable those types of tokens to be used for cross border payments, with the U.S. Treasury sanctioning several token platform operators yesterday. 

Turkey’s Takasbank, a subsidiary of the local stock exchange, launched BiGA Digital Gold back in 2019.

Last year the Zimbabwean government issued gold-backed tokens, ZiG, that can be used to make payments. In the United States, asset manager WisdomTree  launched gold tokens, with the gold held in custody by HSBC. And in Japan, Mitsui & Co. Digital Commodities issued the Zipangcoin.

Various gold mints have dabbled with DLT and tokenization. Perth Mint abandoned its gold token initiatives. In 2018, the UK’s Royal Mint ditched its plans before launch. Earlier this month, the Royal Canadian Mint said it was adopting DLT, but for provenance rather than retail access. 

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