HSBC is betting on tokenised deposits as the core payment mechanism for blockchain-based finance, as banks position themselves for wider institutional adoption of digital assets.<\/p>\n
The UK-headquartered lender is expanding its push into tokenised deposits as the bank attempts to position itself as a \u201cbridge\u201d between traditional finance and digital assets.<\/p>\n
Tokenised deposits are HSBC\u2019s \u201cinstrument of choice\u201d for blockchain payments, said Manish Kohli, the bank\u2019s head of global payments solutions.<\/p>\n
\u201cOur intervention strategy of choice is tokenised deposits. That\u2019s where we believe that as a global bank \u2014 and knowing what a lot of our customers have articulated to us as the needs that they have \u2014 tokenised deposits are a very strong capability,\u201d he said.<\/p>\n
\u201cWe are making big bets and we are investing very heavily in this space,\u201d he added.<\/p>\n
HSBC\u2019s tokenised deposit service is active in Hong Kong, Singapore, the UK and Luxembourg, and last month expanded to the US. It currently operates in seven currencies, with the bank planning to continue developing the service.<\/p>\n
Tokenised deposits offer 24\/7 movement of money, are \u201cbank insured\u201d and able to earn interest as a commercial deposit, Kohli said, offering a clear advantage over stablecoins. <\/p>\n
\u201cIt has the ability of being totally compliant with regulations because we do all the sanction screening [and] payment transparency along the way,\u201d Kohli said.<\/p>\n
\u201cA lot of our customers are curious because they solve for real problems.\u201d <\/p>\n