Banking giant Hong Kong and Shanghai Banking Corporation (HSBC) have tested the use of tokenized deposits – from issuance to transfer to redemption – with major Chinese banker Ant Group, founded by Jack Ma, in a sandbox set up by the Hong Kong Monetary Authority.
The banking institution-led initiative aimed to explore the potential of deposit tokenization by enabling always-on, real-time treasury fund movements between a company’s accounts within the HSBC network.
During the test, HSBC was connected to the blockchain platform developed by Ant Group and supported by Ant Group’s banking partners. In an official communication shared with Cointelegraph, HSBC revealed that the test included the issuance, transfer and redemption of deposit tokens, adding:
“It will pave the way for future research into how blockchain and tokenization can increase efficiency and promote innovations in corporate treasury management.”
The involvement of Ant Group’s banking partners enhances the transfer of sovereign wealth funds with improved turnaround time, cost efficiency and visibility. Vincent Lau, Global Head of Emerging Payments, Global Payments Solutions, HSBC, confirmed the bank’s interest in continuing to leverage tokenized deposits and other financial innovations to streamline and optimize treasury management for customers.
HSBC has also been an active participant in several central bank digital currency (CBDC) initiatives, including the Swift cross-border CBDC initiative Project mBridge.
Related: HSBC is testing a quantum-safe financial transaction network in Britain
HSBC reportedly introduced its first local cryptocurrency services in June 2023.
SCOOP: HSBC, the largest bank in Hong Kong, today allows its customers to buy and sell Bitcoin and Ethereum ETFs listed on the Hong Kong stock exchange, becoming the first bank in Hong Kong to do so. This move will increase local users’ exposure to cryptocurrencies in Hong Kong. pic.twitter.com/vH0LieSVGw
— Wu Blockchain (@WuBlockchain) June 26, 2023
According to the report, HSBC would offer cryptocurrency ETFs listed on the Hong Kong Stock Exchange, including CSOP Bitcoin Futures ETF, CSOP Ethereum Futures ETF and Samsung Bitcoin Futures Active ETF.
HSBC did not immediately respond to Cointelegraph’s request for comment.
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