HSBC placed tokenized USD notes with institutional investors in Hong Kong, using Marketnode for issuance and settlement. The pilot tests blockchain efficiency for structured products.
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HSBC has completed its first blockchain-based structured product issuance, placing tokenized U.S. dollar-denominated notes with institutional investors in Hong Kong.
The pilot used Marketnode, an Asia-Pacific digital market infrastructure operator, as both tokenisation agent and digital paying agent. Marketnode handled the digital issuance and managed payment flows between HSBC and the investor. HSBC said the test was designed to see whether tokenisation can make the issuance, settlement, administration, and servicing of structured products more efficient for institutional markets.
Suvir Loomba, HSBC's regional head of securities services for Asia and a Marketnode board member, said the issuance builds on the bank's digital asset work and shows how it is working with market participants to develop practical blockchain solutions for institutional finance. Loomba added that tokenisation can simplify multiple stages of a structured product's lifecycle.
"As one of the leading issuers of structured products in Asia, we see clear potential for tokenisation to improve the efficiency of issuance, settlement and servicing, whilst creating a more scalable foundation for future product innovation," Patrick Boumalham, HSBC's head of institutional sales for Asia, said in a statement.
The pilot is part of HSBC's digital assets strategy and demonstrates how blockchain technology can be applied to improve capital markets processes for institutional participants, the bank said.
The test adds to Hong Kong's push to bring traditional financial products onto blockchain infrastructure. In June, the Hong Kong Monetary Authority set up a tokenized bond expert group after the government issued more than HK$6.8 billion ($868 million) in tokenized bonds across several offerings. The group includes HSBC, JPMorgan Securities, Standard Chartered, UBS, Ant Digital, HashKey Group, and other market participants. It is examining legal frameworks, market practices, and infrastructure needed to expand tokenized bond activity.
HSBC has also strengthened its digital asset presence in Hong Kong. In April, the bank became one of the first institutions to receive a Hong Kong Monetary Authority stablecoin issuer license under the city's new regulatory framework, allowing it to issue regulated stablecoins alongside Standard Chartered-backed Anchorpoint Financial.
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