Capital markets News

UAE plans tokenized bonds issued on HSBC Orion, listed on ADX


HSBC Bank Middle East is partnering with the Abu Dhabi Securities Exchange (ADX) to explore fixed income securities, including tokenized bonds. The intention is to use HSBC Orion, the bank’s digital asset platform, to issue digital bonds and list them on ADX.

“We believe that digital assets will grow in significance in the future and ADX intends to be at the forefront of this innovation,” said Abdulla Salem Alnuaimi, CEO of ADX. “ADX and HSBC will explore a framework that enables digital assets, such as digital bonds, to be made available on HSBC Orion, the bank’s digital assets platform, and to be listed on ADX.”

One of the things slowing adoption of digital bonds is a lack of secondary markets. Hence the importance of the news.

To date HSBC Orion’s main claim to fame is the issuance of a £50 million digital bond by the European Investment Bank (EIB) in February. It’s also developing a digital asset custody offering.

HSBC has used blockchain or DLT for years, but it’s now ramping up its activities. Just this week it unveiled a tokenized gold offering and two tokenized deposit trials in Hong Kong, one with Ant Group and another with Visa. It was also an active participant in tokenized deposit trials for the Regulated Liability Network in the UK and US.

One of HSBC’s lesser known blockchain footprints is in the foreign exchange (FX) market, where it uses a DLT solution to settle intragroup FX trades and also with Wells Fargo. By late 2022, its FX Everywhere solution had processed $4.3 trillion in transactions.

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