HSBC launches Hong Kong's first Blockchain Settlement service

HSBC has launched Hong Kong's first settlement service using Blockchain technology. This service converts ordinary bank deposits into digital tokens, meaning that businesses can transfer funds almost instantly.

According to Lewis Sun, the Global Head of Domestic and Emerging Payments at HSBC's Global Payments Solutions, this payment method may be cheaper and faster compared to traditional systems.

According to reports, HSBC's newly launched tokenized deposit scheme allows businesses to convert ordinary deposits into tokens on a blockchain platform. The funds of the businesses still remain on the bank's balance sheet, but they can send and receive these funds like sending digital currencies.

Sun stated that this method can save additional costs and delays, and it can also help track every payment on the blockchain, allowing businesses to understand the flow of funds at any time.

HSBC stated that the service operates around the clock. Corporate clients can transfer HKD and USD between HSBC Hong Kong wallets at any time.

This represents a significant change compared to standard banking operations, where transfers are typically paused during the night or on weekends. Real-time transfers mean that financial managers can quickly respond to market fluctuations or urgent demands.

Ant International, a subsidiary of Alibaba Group, is the first customer to test the system. HSBC stated that Ant International used its Whale platform to transfer funds instantly. After a pilot in May, the bank incorporated the relevant experience into its formal services.

Kelvin Li, the General Manager of Ant International Platform Technology, stated that tokenization is a bridge between traditional banking and Blockchain. He also mentioned that the project aims to make financial work more transparent and efficient.

HSBC's initiative has received support from the Hong Kong Monetary Authority's Distributed Ledger Technology Regulatory Sandbox. HSBC is one of the few banks conducting proof-of-concept trials under the Hong Kong Monetary Authority's tokenization program.

In August, the Hong Kong Monetary Authority established a central bank digital currency testing mechanism. Six companies, including HSBC, began to experiment with tokenized currency for digital asset trading.

This move brings Hong Kong closer to interbank Blockchain Settlement. HSBC plans to expand its services to the Asian and European markets in the second half of 2025.

The new system may change the way large enterprises handle cash. Companies no longer have to wait for bank opening hours, nor do they have to pay unexpected fees. The real-time information of each payment can be transformed into a clearer liquidity view throughout the day.

However, the project also faces challenges. Enterprises must update their backend systems to be able to interact with tokens. In addition, the Blockchain platform must remain secure to prevent intrusions or technical failures.

According to the latest ranking of the top 50 lending institutions in Europe released by S&P Global Market Intelligence, HSBC is the largest bank in Europe by asset size.