HSBC Debuts Cross-Border Tokenized Deposit Offering

HSBC expanded its tokenized deposit service (TDS) to include cross-border transactions.

The real-time solution for corporate clients conducted its first U.S. dollar cross-border transaction this month between Hong Kong and Singapore to optimize treasury management for Ant International, the solution’s “pioneer customer,” the banking giant said in a Monday (Sept. 22) press release provided to PYMNTS.

“The service addresses the growing demand for instant, cross-border settlement by providing an always-on, blockchain-based platform, whilst supporting the rise of digital money and meeting clients’ evolving needs,” HSBC said in the release.

Following the launch of the TDS for domestic payments in Hong Kong and Singapore earlier this year, the service has also been expanded to the United Kingdom and Luxembourg markets, supporting domestic payments in additional currencies such as the pound, euro and U.S. dollar, the release said. HSBC plans to scale the service across its key markets.

With the help of HSBC’s distributed ledger technology, traditional fiat deposits are represented by digital tokens, letting cash movements be customized and executed instantly from clients’ systems, according to the release. By doing away with cut-off times and time-zone barriers, the service integrates with existing treasury operations and corporate systems, bolstering efficient treasury operations and effective cash flow management.

“Tokenized deposits represent a major step forward in the future of transaction banking and open new opportunities for our clients,” Manish Kohli, head of global payments solutions at HSBC, said in the release. “By combining real-time liquidity with programmability and secure settlement through blockchain, we can help clients better manage their liquidity, streamline their operations and future-proof their treasury functions in a rapidly evolving financial landscape, with the benefits of emerging forms of digital money and its associated technology.”

Money and assets are transforming thanks to tokenization on the blockchain.

“On-chain tokenization is moving from concept to practice, with players like Visa, Mastercard, JPMorgan and other commercial banks exploring or piloting real-world tokenized payment and financial systems,” PYMNTS wrote April 21. “For chief financial officers and corporate treasurers, tokenization isn’t just a tech issue; it could represent a capital strategy shift.”