HSBC Launches Hong Kong’s First Blockchain-Based Settlement Service

Coin WorldFriday, May 23, 2025 4:02 pm ET
1min read

HSBC Holdings has introduced Hong Kong’s first blockchain-based settlement service, marking a significant advancement in the region’s fintech landscape. The service, known as the Tokenised Deposit Service, converts traditional bank deposits into digital tokens on a blockchain platform, facilitating real-time payments in both Hong Kong dollars and US dollars. This innovation allows for around-the-clock transfers between HSBC Hong Kong wallets, significantly reducing costs and processing times compared to traditional banking systems.

The launch of this service is part of a broader initiative by the Hong Kong Monetary Authority (HKMA) to foster digital money innovation. The HKMA’s Supervisory Incubator for Distributed Ledger Technology has supported HSBC’s tokenized deposit service as its first live initiative. This program aims to develop the tokenization market and explore blockchain applications while maintaining compliance and security standards.

Ant International, an affiliate of Alibaba Group Holding, was the first client to utilize the new service, completing an instant fund transfer using the deposit tokenization technology. This successful transaction followed a pilot test between HSBC and Ant International on Ant’s blockchain-based Whale platform. The collaboration highlights the potential of tokenization to bridge blockchain technology with conventional banking, offering more transparent, accessible, and efficient treasury management solutions for businesses worldwide.

The Tokenised Deposit Service is designed to support treasury management for corporate clients, providing a safe and fully compliant approach to improving payments and cash management. Lewis Sun, HSBC’s global head of domestic and emerging payments, emphasized that Hong Kong’s commitment to digital money innovation makes this service a new benchmark for efficiency in corporate digital money solutions.

The HKMA’s broader blockchain initiative includes a central bank digital currency testing regime, which was unveiled in August 2024. This regime allowed HSBC and five other participants to experiment with tokenized money for digital asset transactions, bringing Hong Kong closer to implementing interbank settlements through blockchain technology. The regulatory framework provides a solid foundation for financial institutions to explore blockchain applications while ensuring compliance and security standards needed for traditional banking operations.