Key Highlights
- •HSBC will offer tokenized deposits to corporate clients in the US and UAE starting next year.
- •The service allows instant, 24/7 payments and helps companies manage cash and liquidity.
- •HSBC is exploring stablecoins and may issue one in the future, depending on legal clarity.
HSBC Holdings Plc announced plans to offer tokenized deposits to its corporate clients in the U.S. and the United Arab Emirates in the first half of next year, as banks push further into blockchain technology for payments.
The Tokenized Deposit Service will allow clients to send money locally and across borders in seconds at any time, instead of being limited to working hours.
“The topic of tokenization, stablecoins, digital money and digital currencies has obviously gathered so much momentum. We are making big bets in this space,” said Manish Kohli, Head of HSBC Global Payment Solutions. He added that the system can help large companies better manage liquidity.
Modernizing Corporate Payments
HSBC already offers its tokenized deposit service in Hong Kong, Singapore, the UK, and Luxembourg. The bank currently processes payments in euros, pounds, US dollars, Hong Kong dollars, and Singapore dollars. Next year, when the service comes to the Middle East, it will include UAE dirhams.
The bank is also planning to use tokenized deposits for programmable payments and autonomous treasuries, which use automation and artificial intelligence to independently manage cash and liquidity risk.
Banking and Blockchain Trends
Other major banks, including Deutsche Bank, Citigroup, Banco Santander, JPMorgan Chase, and Bank of New York Mellon, are exploring or have launched similar deposit token services.
While financial firms have experimented with blockchain for more than a decade, only a few projects have gone live. HSBC processes roughly $500 trillion in electronic payments each year, though it has not disclosed volumes for its tokenized deposit service.
The bank is also exploring stablecoins and is in talks with issuers to provide reserve management and settlement services. Kohli said that HSBC has not ruled out creating its own stablecoin in the future. “It’s something that we would continue to evaluate. There are a few things that need to happen, which is the legal framework needs to be clearer,” he said.
This launch adds to the trend of finance firms moving into the digital system. Tokenized deposits can help companies move funds anytime and reduce the delay from traditional financial services. Additionally, they can reduce the stress of managing cash and open the door for new investment tools like automated treasuries. If more banks follow this path, global payments could become more flexible for businesses worldwide.