HSBC's Tokenized Deposits: Tapping $16T RWA Market to Meet Investor Demand

HSBC Holdings PLC is set to introduce bank-backed tokenized deposits in the United States and United Arab Emirates by 2026, marking a strategic expansion into digital asset management as traditional banking models evolve. The move aligns with the bank's broader focus on serving high-net-worth and globally connected clients, building on recent leadership appointments and research initiatives that highlight shifting investor priorities and technological adoption.

The initiative reflects a growing industry trend toward tokenizing real-world assets (RWAs), a market projected to surge to $16.1 trillion by 2030, according to a 2024 report by Boston Consulting Group and ADDX. Tokenization enables fractional ownership, enhanced liquidity, and streamlined compliance, addressing inefficiencies in traditional financial systems. HSBC's entry into this space follows its recent sale of retail banking operations in Sri Lanka to Nations Trust Bank PLC, part of a broader strategy to reallocate resources toward higher-margin ventures.

Regulatory developments are also shaping the landscape. The FDIC has announced plans to issue guidance on tokenized deposits and stablecoin applications, signaling increased institutional scrutiny and potential frameworks for secure adoption. This comes as major banks and fintech firms race to establish compliant infrastructure. For example, Treasure Global's subsidiary Tadaa Technologies recently secured a partnership to manage 200 million UNIRWA tokens-backed by real-world assets-projected to hold a value of $100 million. Such projects underscore the growing appetite for transparent, reserve-backed digital assets.

HSBC's expansion into tokenized deposits is supported by its recent leadership hires and market research. Racquel Oden, U.S. Head of International Wealth, has emphasized client demand for alternative investments, noting that allocations to alternatives have doubled among affluent investors in the past year. Meanwhile, HSBC's Global Entrepreneurial Wealth Report 2025 revealed that 59% of entrepreneurs are diversifying wealth internationally, with technology and AI advancements cited as key growth drivers. These insights position tokenized assets as a natural extension of HSBC's wealth management offerings.

The bank's timing also aligns with shifting investor behavior. A 2025 Affluent Investor Snapshot by HSBC found that 50% of wealthy investors plan to incorporate alternatives into their portfolios within a year, with private market funds and hedge funds gaining traction. Tokenized deposits could appeal to this demographic by offering programmable, transparent, and liquid alternatives to traditional banking products.

Critically, HSBC's foray into tokenization is part of a larger industry shift. Animoca Brands recently estimated that RWA tokenization could unlock $400 trillion in traditional finance markets, while Citi projects private market tokenization could grow 80-fold by 2030. These forecasts highlight the scale of opportunity as banks seek to balance innovation with regulatory compliance.