London-based financial institution HSBC has launched the first bank-backed tokenized gold product for its customers in Hong Kong.
The HSBC Gold Token will allow retail investors to purchase tokenized gold from their smartphones using the bank’s online app, democratizing access to these gold contracts for retail customers and leveraging distributed ledger technology.
HSBC’s Gold Token focuses on customers with an investor profile, that is, they must have an approved investment account and residential access registered with the bank.
The use of distributed ledger technology simplifies the management of these investments, which must follow certain complicated procedures when traded on traditional markets. However, the HSBC product will not allow trading with third parties, as customers will only be able to redeem the gold tokens by selling them to the bank.
Recognizing the allure of the gold-blockchain combination, Maggie Ng, general manager and head of wealth and personal banking at HSBC Hong Kong, stated:
“We recognize the growing demand for digital assets and our clients’ existing familiarity with investing in gold.”
Tokenized gold products are nothing new, as there is already a publicly available distributed market of gold tokens with a market capitalization of over a billion dollars.
HSBC has been involved in gold tokenization initiatives before. In November, the bank announced the launch of a gold tokenization trading platform in London for institutional clients.
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