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Hong Kong Taps Blockchain: Europe’s Biggest Bank Rolls Out 1st Settlement Service

HSBC has rolled out Hong Kong’s first settlement service that uses blockchain technology. It turns regular bank deposits into digital tokens. That means companies can move money almost instantly.

Payments may cost less and happen faster than on traditional systems, according to Lewis Sun, HSBC’s global head of domestic and emerging payments for global payments solutions.

Tokenized Deposit Program

Based on reports, HSBC’s new tokenized deposit program lets firms swap regular deposits for tokens on a blockchain platform. Companies keep their dollars on the bank’s balance sheet, but they can send and receive them like digital coins.

Sun says this approach can cut out extra fees and delays. It also helps track every payment on-chain, so firms know where their cash is at all times.

Round-The-Clock Payments

According to HSBC, the service runs 24 hours a day. Corporate clients can send Hong Kong dollars and US dollars between HSBC Hong Kong wallets any time.

That’s a big change from standard banking, where transfers often pause overnight or on weekends. Real-time transfers mean treasurers can react quickly to market moves or urgent needs.

Pilot With Ant International

Ant International, an affiliate of Alibaba Group Holding, was the first client to test the system. It used Ant’s Whale platform to move funds instantly, HSBC said. After that pilot in May, the bank adopted those lessons into its live service.

Kelvin Li, general manager of platform tech at Ant International, called tokenization a bridge between traditional banking and blockchain. He added that the project aimed to make treasury work more transparent and efficient.

Regulatory Support And Expansion

HSBC’s rollout is backed by the Hong Kong Monetary Authority’s Supervisory Incubator for Distributed Ledger Technology. The bank is one of several that have run proof-of-concept trials under the HKMA’s tokenization program.

In August, the HKMA set up a central bank digital currency testing regime. Six firms, including HSBC, began experimenting with tokenized money for digital asset deals.

Hong Kong Taps Blockchain

That move pushed Hong Kong closer to interbank blockchain settlements. HSBC plans to extend its service to Asian and European markets in the second half of 2025.

The new system may transform the way large companies handle cash. They won’t have to wait until opening time or be hit with unexpected charges. Instant information on each payment translates into clearer views of liquidity throughout the day.

But the project also comes with challenges. Firms must refresh their back-offices so that they can interact with tokens. And blockchain platforms need to remain secure from intrusions or technical glitches.

HSBC is the largest bank in Europe in terms of assets, according to the latest ranking of the 50 biggest European lenders published by the S&P Global Market Intelligence.

Featured image from PYMNTS chart from TradingView



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