Executive Summary

HSBC Holdings Plc has initiated a blockchain-based Tokenised Deposit Service (TDS) for corporate clients, facilitating secure and real-time cross-border currency transfers. The service completed its inaugural international transaction in September, moving US Dollars between Hong Kong and Singapore for Ant International. This expansion follows the earlier introduction of domestic tokenized deposit services and now supports Great British Pounds and Euros in the United Kingdom and Luxembourg, alongside the existing US Dollar capabilities. The move signifies a strategic integration of Distributed Ledger Technology (DLT) into core financial services by a major global bank.

The Event in Detail

HSBC's Tokenised Deposit Service (TDS) leverages proprietary Distributed Ledger Technology (DLT) to represent traditional fiat deposits as digital tokens. This infrastructure enables corporate clients to execute cash movements instantly from their own systems, bypassing conventional banking cut-off times and geographical limitations. The initial cross-border transaction for Ant International involved the transfer of US Dollars between Hong Kong and Singapore, aiming to optimize treasury management. The service offers 24/7 settlement capabilities. Domestically, the TDS was first rolled out in Hong Kong and Singapore, subsequently expanding to the UK and Luxembourg to accommodate transactions in GBP and EUR. HSBC plans to scale this service across its primary markets.

According to Manish Kohli, Head of Global Payments Solutions at HSBC, tokenized deposits represent a significant progression in transaction banking, offering clients real-time liquidity, programmability, and secure blockchain-based settlement. This framework allows for embedding conditional payments and atomic settlement of tokenized assets, enhancing efficiency and operational streamlining for corporate treasury functions.

Market Implications

The introduction of HSBC’s cross-border tokenized deposit service signals a further institutional validation of blockchain and Distributed Ledger Technology within traditional finance. This development aims to enhance the efficiency, cost-effectiveness, and transparency of global transactions, directly addressing the complexities of traditional cross-border payment systems. By offering 24/7 real-time settlements, the service has the potential to reduce intermediary costs and mitigate fraud risks, as DLT ensures immutable transaction records. The programmability feature, enabling conditional payments, could revolutionize how corporate treasuries manage cash flows and execute financial contracts. This initiative positions HSBC to potentially redefine transaction banking standards and contributes to the growing adoption of digital money forms in the global financial infrastructure.

Expert Commentary

Manish Kohli of HSBC emphasized that the service empowers clients to manage liquidity more effectively, streamline operations, and prepare treasury functions for an evolving financial landscape by utilizing emerging forms of digital money and associated technology. Kelvin Li, General Manager of Platform Tech at Ant International, stated that tokenization is crucial for enabling more efficient, cost-effective, and trusted global transactions.

Regarding the broader digital money landscape, Daragh Maher, Head of Digital Asset Research at HSBC, has suggested that tokenized deposits, rather than stablecoins or central bank digital currencies (CBDCs), could emerge as the dominant form of digital money. Maher's analysis points to a "multipolar" outcome for global digital finance architecture, where differing regulatory approaches across jurisdictions could impair interoperability if efficiency is not prioritized. He highlights that despite varied strategies (e.g., US leaning into stablecoins, Europe towards CBDCs, Asia exploring commercialized tokenized money), the core use case for digital money is efficiency.

Broader Context

The expansion of HSBC’s Tokenised Deposit Service aligns with a broader trend of increased blockchain and DLT adoption within financial services. A study from Broadridge indicated that 71% of financial service firms are making significant investments in blockchain and DLT in the current year, a rise from 59% previously. The success of platforms like Broadridge’s Distributed Ledger Repo (DLR), which processed over $280 billion in average daily repo transactions during August 2025, demonstrates the industry's growing confidence in DLT for large-scale financial operations. HSBC's move builds upon its earlier integration work with clients' enterprise DLT-based systems in regions including the United States, Singapore, and Hong Kong, establishing a foundation for its next-generation payment infrastructure for blockchain. This strategic direction positions the bank at the forefront of integrating innovative digital solutions into global finance.