Page 26 - Bullion World Volume 3 Issue 12 December 2023

Bullion World | Volume 3 | Issue 12 | December 2023
HSBC becomes First Global

Bank to offer Tokenised Gold

Mr Paul Voller, HSBC

HSBC recently announced the first institutional trades HSBC recognises the benefits that can arise from an
tokenising the ownership of physical gold held in HSBC’s efficient, targeted use of this technology and is paving
London vault, using distributed ledger technology (DLT). the way in the digital asset space – already utilising
distributed ledger technology (DLT) and tokenisation in
Earlier this year, HSBC also went live with HSBC Orion, production solutions.
its platform for issuing digital assets, and the bank
recently announced plans to launch its digital assets HSBC’s FX Everywhere solution, for example, uses DLT
custody service in 2024. to orchestrate payments across HSBC’s internal balance
sheets as well as with US bank, Wells Fargo, reducing
These complementary capabilities will help HSBC’s FX settlement risk, optimising cash flows and providing
customers enter the world of digital assets in a safe and efficiencies to existing back-office processes. FX
secure manner. Everywhere has been live for five years and has settled
more than 13 million FX trades worth over US$7 trillion.
The combined power of distributed ledger technology
(DLT) and tokenisation are seen as having the potential First Global bank to offer tokenised gold
to revolutionise financial markets. While the adoption of As one of the world’s largest precious metals custodians
the technology is still in its early stages, key initiatives are and one of four clearers of the loco London market,
emerging that present a preview of the future. HSBC has become the first global bank to offer
tokenised physical gold, bringing tokenisation to the
Investors are increasingly looking to add digital assets $31bn a day loco London precious metals market.
to their portfolio, with tokenisation often sighted as a key HSBC developed this capability by creating a ‘digital
area of innovation. Not only does the use of distributed twin’ of an existing physical asset – specifically loco
ledger technology bring about operational efficiencies, London gold that is custodied in HSBC’s vault. Tokenised
streamlining clearing and settlement flows, but the physical gold can be traded on demand between
innovation of tokenisation also provides the opportunity HSBC and institutional investors through the HSBC
for the ‘democratisation’ of traditional asset classes, Evolve single dealer platform, or through an application
driving growth through increased accessibility and programming interface (API).
adoption.

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