HSBC has completed the issuance of the first blockchain-based digital native structured product using tokenized US dollar denominated banknotes in a private placement to institutional investors in Hong Kong.
HSBC said the pilot transaction involved US dollar-denominated structured notes issued in Hong Kong with support from Asia-Pacific digital market infrastructure operator Marketnode, which acted as both tokenization agent and digital payments agent.
Marketnodes enabled digital issuance by issuing banknotes directly on the blockchain and also managed payment flows between HSBC and investors. HSBC said the pilot tested how tokenization could streamline the issuance, settlement, management and servicing of structured products for institutional markets.
Commenting on the transaction, Subir Loumba, Head of Asia Securities Services at HSBC and Director of Marketnode, said the issuance builds on the bank’s digital assets business and demonstrates how the bank is working with market participants to develop practical blockchain solutions for institutional finance.
Roomba added that tokenization can simplify multiple stages of a structured product’s lifecycle, including issuance, settlement, management, and ongoing servicing.
“As one of the leading issuers of structured products in Asia, we see the clear potential of tokenization to improve issuance, settlement and servicing efficiency while creating a more scalable foundation for future product innovation,” said Patrick Boumalram, HSBC’s head of institutional sales in Asia, in an accompanying statement.
HSBC said the structured product pilot forms part of its digital asset strategy and demonstrates how blockchain technology can be applied to improve capital markets processes for institutional investors.
Hong Kong continues to build tokenized market
The latest pilot further strengthens Hong Kong’s ongoing efforts to bring traditional financial products to blockchain infrastructure.
In June, the Hong Kong Monetary Authority established a Tokenized Bond Expert Group after the Hong Kong government issued more than HK$6.8 billion ($868 million) of tokenized bonds across multiple products. The group, which includes HSBC, JPMorgan Securities, Standard Chartered, UBS, Ant Digital, Hashkey Group and other market participants, is considering the legal framework, market practices and infrastructure needed to scale up tokenized debt activity.
HSBC also continues to strengthen its digital asset presence in the city. In April, the bank became one of the first institutions to receive a stablecoin issuance license under the Hong Kong Monetary Authority’s new regulatory framework, allowing it to issue regulated stablecoins alongside Standard Chartered-backed Anchorpoint Financial.
