HSBC has successfully completed its first blockchain-based issuance of a digitally native structured product, utilizing tokenized U.S. dollar-denominated notes in a private placement for institutional investors in Hong Kong.
During the pilot transaction, U.S. dollar-denominated structured notes were issued in Hong Kong with the assistance of Asia-Pacific digital market infrastructure operator Marketnode, which served as both the tokenisation agent and digital paying agent.
Marketnode facilitated digital issuance by directly issuing the notes on the blockchain, while managing payment flows between HSBC and the investor. This pilot aimed to test how tokenisation can enhance the efficiency of issuance, settlement, administration, and servicing processes for structured products in institutional markets.
Commenting on the transaction, Suvir Loomba, regional head of securities services for Asia at HSBC and a board member of Marketnode, highlighted that the issuance reflects the bank’s commitment to digital asset initiatives and showcases its collaboration with market participants to develop practical blockchain solutions for institutional finance.
Loomba emphasized that tokenisation has the potential to streamline various stages of a structured product’s lifecycle, including issuance, settlement, administration, and ongoing servicing.
“As a prominent issuer of structured products in Asia, we recognize the significant benefits of tokenisation in enhancing the efficiency of issuance, settlement, and servicing processes, while creating a more scalable foundation for future product innovation,” stated Patrick Boumalham, HSBC’s head of institutional sales for Asia.
HSBC stated that the structured product pilot aligns with its digital assets strategy and demonstrates the application of blockchain technology to improve capital markets processes for institutional participants.
Hong Kong’s Advancement in Tokenised Markets
This latest pilot initiative contributes to Hong Kong’s continuous efforts to integrate traditional financial products onto blockchain infrastructure.
In June, the Hong Kong Monetary Authority established a tokenized bond expert group following the issuance of over HK$6.8 billion ($868 million) in tokenized bonds. The group, which includes HSBC, JPMorgan Securities, Standard Chartered, UBS, Ant Digital, HashKey Group, and other market participants, is exploring legal frameworks, market practices, and infrastructure enhancements required to expand tokenized bond activities.
HSBC has also strengthened its digital asset presence in the city, becoming one of the initial institutions to obtain a Hong Kong Monetary Authority stablecoin issuer license in April. This license enables the bank to issue regulated stablecoins alongside Standard Chartered-backed Anchorpoint Financial under the city’s new regulatory framework.