London-based financial institution HSBC has entered the world of cryptocurrencies by launching 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 directly from their smartphones using the bank’s online app, democratizing access to these gold contracts for everyday customers and leveraging distributed ledger technology.
HSBC is advancing its dominance in the gold markets with the use of distributed ledger technology. Last week, the company launched the first bank tokenized gold offering using this technology in Hong Kong.
The HSBC Gold Token is now available on Orion, the bank’s online digital asset application, for retail clients interested in investing in gold in a simplified way.
HSBC’s focus with the Gold Token is customers with an investor profile, that is, those who have an approved investment account and registered residence with the bank.
The use of distributed ledger technology simplifies the management of these investments, which often involve complex procedures when traded in traditional markets. However, HSBC’s product will not allow third-party trading, as customers can only redeem gold tokens by selling them back to the bank.
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With this initiative, the company recognizes the relevance of distributed technologies, incorporating them into its strategy to dominate one of the largest gold pricing markets, alongside London and New York. Recognizing the appeal of the gold-blockchain combination, Maggie Ng, general manager of HSBC Hong Kong and head of wealth and personal banking, 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 a publicly distributed market of gold tokens with a market value in excess of a billion dollars. However, HSBC’s product has approval from the Securities and Futures Commission (SFC), the country’s security regulator.
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, targeting a $525 billion market in Greater London.
