Hang Seng Taps Ethereum for Tokenized Gold Fund Units
Hang Seng Investment Management, a Hong Kong-based physically backed gold exchange-traded fund (ETF), has issued an option to acquire the asset in the future.
The Hang Seng Gold ETF, which debuted on the Hong Kong Stock Exchange on Thursday under stock code 3170, is designed to track the LBMA Gold Price AM, the morning benchmark widely used in London. The fund is structured as a passive ETF and holds physical gold bars that meet the London Bullion Market Association's optimal supply criteria, according to product specifications.
The gold held by ATAF is stored in a Hong Kong warehouse, with HSBC acting as gold custodian. The structure allows for both cash and, in some cases, gold creation and redemption by participating traders, although retail investors trade as ordinary shares on the secondary market.
The listed ETF unit trades in Hong Kong dollars and has a board lot size of 50 units. An ongoing fee of 0.40% per annum and an annual trailing variance of 0.50%. The Hang Seng fund does not intend to pay any dividends, meaning that returns will depend on movements in the price of gold.
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Hang Seng charts marked gold units
Beyond the listed ETF, Hang Seng also revealed plans for unlisted units of the same fund. These token units, which represent ownership interests registered on the blockchain infrastructure, are not yet available and remain subject to regulatory approvals.
HSBC has been appointed as token agent and will issue digital tokens representing ownership of currency units. Each token corresponds to a unit (or a fraction of a unit) and subscription and redemption transactions are recorded on the public blockchain.
“Initially, the tokenization agent intends to use Ethereum as the main blockchain. Other public blockchains with comparable security resilience and distributed ledger technology may be implemented in the future,” he said.
Still, tokenized units may only be registered or redeemed by authorized dealers. There will be no secondary market trading.
Gold prices rose another 4% on Thursday as investors continued to seek safe-haven assets amid growing economic and geopolitical uncertainty.
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NYSE will develop a tokenized stock platform.
Last week, the New York Stock Exchange and its parent Intercontinental Exchange announced they were developing a blockchain-based platform for tokenized stocks and ETFs, with plans for 24/7 trading and imminent settlement, pending regulatory approval.
Meanwhile, in a recent report, Sygnum said traditional financial institutions are moving in the direction of blockchain-based infrastructure, tokenization is expected to go mainstream in 2026. Sygnum co-founder and CEO Matthias Imbach predicted that up to 10% of major institutions could be tokenized at the launch of new bond issuance.
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