HSBC Launches Blockchain-Based Settlement Service for Real-Time Payments

HSBC Holdings has launched the first blockchain-based settlement service in the region, marking a significant advancement in digital financial services. This innovative service utilizes tokenized deposits to enable real-time, secure, and efficient payments between corporate accounts. The service allows businesses to conduct transactions in Hong Kong dollars (HKD) and U.S. dollars (USD) around the clock, providing a faster and more cost-effective alternative to traditional payment methods.

The new system converts regular bank deposits into digital tokens using a cryptographic ledger, which can then be transferred instantly between digital wallets. This process not only speeds up transactions but also reduces costs associated with traditional banking methods. According to Lewis Sun, the global head of payments at HSBC, this blockchain-based settlement service offers a more efficient and secure way for businesses to manage their finances.

Currently, the service is accessible only to users in the region. However, the company plans to launch in Asia and Europe later this year. The goal is to offer more companies better solutions for managing their finances. The first company to use the new system was Ant International, a member of Alibaba Group. The company finished a real-time money transfer with HSBC’s tokenized deposit service. In order to accomplish this, the company used its own platform called Whale. Because of this, their financial procedures became faster, more open and simpler to adjust.

It is an extension of earlier work HSBC and Ant International did together. Kowloon West LNG Company and Otter Creek both joined a collaboration initiated by the Hong Kong Monetary Authority (HKMA) in October 2024 under Project Ensemble. The experiment focused on sending cross-bank transfers using tokenized deposits. The findings influenced how HSBC created its new service.

HSBC’s new system also supports HKMA’s digital finance goals. This service is the first project to be tested as part of the HKMA’s Supervisory Incubator for Distributed Ledger Technology (DLT). The initiative allows banks to use blockchain technology, all while following the rules set by regulators. HSBC is working to demonstrate how DLT can make banking more advantageous and safer.

Ant International’s General Manager, Kelvin Li, welcomed the continued relationship with HSBC. He argued that tokenization combines the strong safety of traditional banking with the efficient drive of blockchain. He further stressed that public and private efforts should join forces to influence how finance evolves.

The service was developed for corporate clients who have wallets in the region. According to HSBC, customers can transfer money easily and immediately between these wallets. It is able to complete large financial transactions in real-time, too. HSBC is considering expanding the system and investigating how other uses may work. Digital currency transactions and broader tokenization projects are parts of this. The bank aims to use its network to help build a bigger digital framework.

In short, HSBC’s tokenized deposit service represents an important leap toward digital banking. It delivers a straightforward, quick, and modern method for businesses to carry out payment transactions. With the help of Ant International and HKMA, HSBC is helping to guide the development of finance in the region and other countries.