HSBC has completed its first blockchain-based issuance of a digitally regulated product, using tokenized US dollar-denominated notes in a private placement to institutional investors in Hong Kong.
summary
- HSBC has completed its first blockchain-based issuance of a digitally regulated product through a private placement in Hong Kong.
- Marketnode supported the deal by issuing notes on the blockchain and managing digital payment flows between HSBC and the investor.
- The pilot builds on growing tokenization efforts in Hong Kong as financial institutions continue to test blockchain for capital markets.
According to HSBC, the deal is experimental included The USD-denominated structured notes were issued in Hong Kong with the support of Asia-Pacific digital market infrastructure operator Marketnode, which acted as the tokenization agent and digital payment agent.
By issuing notes directly on the blockchain, the Marketnode has enabled digital issuance while also managing payment flows between HSBC and the investor. HSBC said the pilot tested how the token could make issuing, settling, managing and servicing structured products more efficient for institutional markets.
Speaking about the deal, Suvir Lomba, Regional Head of Securities Services for Asia at HSBC and a member of Marketnode’s Board of Directors, said the issuance builds on the bank’s digital assets work and demonstrates how it works with market participants to develop practical blockchain solutions for institutional finance.
Lomba added that tokenization can streamline multiple stages of a regulated product’s lifecycle, including issuance, settlement, management, and ongoing service.
“As one of the leading issuers of structured products in Asia, we see clear potential for tokenization to improve the efficiency of issuance, settlement and servicing, while creating a more scalable foundation for future product innovation,” said Patrick Bomalham, head of institutional sales for Asia at HSBC, in an accompanying statement.
According to HSBC, the structured demo product forms part of its digital assets strategy and demonstrates how blockchain technology can be applied to improve capital markets operations for institutional participants.
Hong Kong continues to build token markets
The latest pilot adds to Hong Kong’s ongoing endeavors to bring traditional financial products to the blockchain infrastructure.
In June, the Hong Kong Monetary Authority Established an expert group for token bonds After the government issued more than HK$6.8 billion (US$868 million) in token bonds through several offerings. The group includes HSBC, JPMorgan Securities, Standard Chartered, UBS, Ant Digital, HashKey Group and other market participants, and is examining the legal frameworks, market practices and infrastructure needed to expand token bond activity.
HSBC also continued to strengthen its digital asset presence in the city. In April, the bank became one of the first institutions to obtain the Hong Kong Monetary Authority Stablecoin Issuer License Under the city’s new regulatory framework, allowing it to issue regulated stablecoins alongside Standard Chartered Bank-backed Anchorpoint Financial.
