Global megabank HSBC is doubling down on tokenization against stablecoins, as global banks rush to keep up with the stablecoin race.
According to a report from Bloomberg on Tuesday, HSBC Holdings will begin offering tokenized deposits to its corporate customers in the US and the United Arab Emirates in the first half of 2026.
HSBC’s Tokenized Deposit Service (TDS) allows customers to send money domestically and internationally in seconds, 24 hours a day, says Manish Kohli, HSBC’s Global Head of Payment Solutions.
“The topic of tokenization, stablecoins, digital money and digital currencies has clearly gained so much momentum. We are making big bets in this area,” Kohli said.
Tokenized deposits versus stablecoins
Tokenized deposits are digital representations of bank deposits issued on a blockchain by regulated banks, allowing instant 24/7 transfers and programmable payments.
Unlike stablecoins, which are often pegged to fiat currencies such as the US dollar and backed by assets such as sovereign debt, deposit tokens are created based on the issuer’s balance sheet.
While stablecoin issuers like Circle are not allowed to pay returns on users’ holdings of stablecoins, tokenized deposits offer interest payments as one of their main features.
Stablecoins vs. tokenized deposits: Source: Fireblocks
According to Kohli, HSBC plans to expand the use cases of tokenized deposits into programmable payments and autonomous treasuries, or systems that leverage automation and AI to independently manage cash and liquidity risk.
“Across almost every major company we talk to, we see a big theme around treasury transformation,” said the HSBC director.
Launch of HSBC stablecoin not excluded
The product’s expansion into the US and UAE is HSBC’s latest, following the product’s debut in Hong Kong in May, with Ant International becoming the first customer to use the TDS solution.
The bank has since expanded its offering in multiple markets, including Singapore, the United Kingdom and Luxembourg.
Source: Bloomberg Intelligence
HSBC’s choice to move forward with tokenized deposits comes at a time when major banks like JPMorgan are doubling down on technology.
Related: How TradFi Banks are Advancing New Stablecoin Models
On November 12, JPMorgan introduced the JPM Coin, a deposit token that represents US dollar deposits at the bank. The company pushed back against the token versus traditional stablecoins, with JPMorgan blockchain director Naveen Mallela emphasizing that deposit tokens operate within traditional banking frameworks.
While HSBC is promoting tokenized deposits, it is not ruling out the potential issuance of a stablecoin.
“It is something that we would continue to evaluate,” Kohli said, adding: “There are a few things that need to happen, namely that the legal framework needs to be clearer.”
Magazine: Saylor Denies Bitcoin Selloff, XRP ETF Debut Tops the Chart: Hodler’s Digest, November 9 – 15