HSBC has decided to expand its tokenised deposit service to corporate customers in the US and the UAE during the first half of next year. The move aims to extend a system that HSBC already operates in several financial centres. The initiative is in line with a wider effort among global banks to test how blockchain-based infrastructure might alter cross-border payments and liquidity management.
The bank already supports transactions in multiple major currencies, including the EUR, GBP, USD, HKD and SGD, with UAE dirhams expected to be added once the service reaches the Middle East. According to representatives from HSBC, the system is designed to move funds around the clock and settle transfers within seconds, which they say may give large companies more flexibility in managing cash positions.
Growing interest in deposit tokens
Deposit tokens function as digital claims on existing bank deposits and differ from stablecoins, which are typically backed by liquid assets such as government bonds. Because deposit tokens remain within the banking system and can accrue interest, banks argue they may appeal to firms holding sizeable balances.
According to Bloomberg, several major lenders, including those in Europe and the US, are examining similar services. Their programmes accompany developments such as the recently enacted Genius Act in the US, which introduces a regulatory framework for stablecoins. Despite more than a decade of industry testing, only a limited number of blockchain payment projects have been deployed at scale, and activity remains modest compared with traditional transaction volumes.
HSBC processes around USD 500 trillion in electronic payments annually, but has not yet published figures for tokenised deposit usage. Bank officials said they are also studying potential applications in programmable payments and automated treasury management, where artificial intelligence could assist with managing liquidity risk. They noted that many large corporations are reassessing their treasury operations and exploring digital tools.
Apart from deposit tokens, HSBC is holding discussions with stablecoin issuers regarding reserve management and settlement services. The bank has not ruled out developing a stablecoin directly or in partnership with other institutions, though officials said clearer legal structures would be required before following through with such a step.
