Why Hong Kong’s Biggest Bank Is Expanding into Tokenization

Hong Kong's leading bank HSBC is set to expand its token footprint into real-world assets. This move is aimed at providing customers with new digital products.

As part of its strategic plan, HSBC aims to make the city a front runner in digital finance, bolstered by recent government initiatives to increase public access to digital assets.

HSBC wants to stay away from Crypto

This strategic expansion was highlighted following the launch of the HSBC Gold Token. It stands as the first retail product of its kind in Hong Kong.

At a recent media roundtable, HSBC CEO Noel Quinn shared insights on the benefits of tokenization.

“Tokenization is a more efficient way of trading and monetizing that asset. In theory, you can tokenize anything. The main criteria for me is whether there is substance behind the token. Does it have predictability? Is there?” said Quinn.

Tokenized products digitally represent assets on blockchain platforms. This method allows direct access to investors or distribution through intermediaries. The Hong Kong Securities and Futures Commission recognizes the importance of simulating real-world assets to modernize trading and financial practices.

Read more: What is Tokenization on Blockchain?

Focusing on tangible assets such as gold and bonds, HSBC deliberately avoids cryptocurrencies.

“Cryptocopy may be based on the same technology, but it is more volatile and unpredictable. HSBC is moving away from crypto,” argued Quinn.

However, public blockchains like Ethereum need cryptocurrency to maintain transparency and decentralization. These are critical to the development of decentralized financial systems compared to the centralized models of traditional banks.

Moreover, as part of a broader global movement, the Bank for International Settlements (BIS) and seven central banks have launched Project Agora. This project aims to integrate digital and traditional financial systems to facilitate global financial operations.

The project addresses long-standing inefficiencies in cross-border payments by merging tokenized commercial and central bank funds on a unified ledger. Strengthens financial controls, such as anti-money laundering efforts.

Read more: What is Real World Asset (RWA) Token Impact?

At the same time, UK Finance is ramping up a trial ledger pilot to track bank payments involving major banks such as Barclays, Lloyds and Citigroup. This pilot is a step towards a trading system that can use tokenized assets to make cross-border transactions smoother, faster and safer.