HSBC Ventures into the Real-World Assets (RWA) Market by Tokenizing Gold

2024-04-03, 03:08

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## [TL; DR]
HSBC has announced that it is offering gold tokens to its retail customers in Hong Kong.

In 2023 the global gold tokenization sector was valued at over $1 billion.

Tokenization of a real-world asset like gold increases its liquidity.

**keywords**: HSBC Gold Token, Retail Investors Hong Kong, Tokenized Gold Investment, Digital Gold Trading, Real-World Asset Tokenization, Gold Token Launch, HSBC Cryptocurrency, Digital Assets Hong Kong, Blockchain Gold Investment, HSBC Tokenized Assets, Gold Investment Trends, Cryptocurrency Market Hong Kong, HSBC Digital Gold, Asset Digitization Finance, Hong Kong Retail Crypto Investment
## Introduction
Tokenization is changing the investment sector as it is closing the gap between the traditional finance market and the cryptocurrency one. Also, investors can easily invest in real world assets through their tokenized versions. On the other hand, the [tokenization of real world assets (RWAs)](https://www.gate.io/learn/articles/staying-up-to-date-on-real-world-asset-tokenization/2298 "tokenization of real world assets (RWAs)") has many advantages such as increasing market liquidity, faster settlements and lower transaction costs.

In this article, we discuss the entry of HSBC, a Hong Kong bank, into the digital asset sector. We shall also [review the global performance of tokenized gold](https://www.gate.io/price/view/tokenized-gold "review the global performance of tokenized gold") as well as the rise of real-world asset digitization. Finally, we shall evaluate the impact of real world asset tokenization on the digital economy.

## HSBC Launches HSBC Gold Token for Retail Customers in Hong Kong
Recently, Hongkong and Shanghai Banking Corporation (HSBC Bank), a leading Hong Kong based bank, announced its plan to launch its HSBC Gold Token for its retail investors Hong Kong. 
HSBC’s tokenized gold investment marks the bank’s entry into the real-world asset tokenization market and the blockchain sector.

This also showcases the potential of blockchain technology to transform the traditional financial sector. Definitely, [after  HSBC’s gold token launch the bank may even undertake bigger projects](https://www.gate.io/post/CQQDFjYMQkpAQgghGxAdA19cWxgEDhkO0O0O/status/5176128 "after  HSBC’s gold token launch the bank may even undertake bigger projects") in the blockchain industry, paving the way for other financial institutions to follow suit.

HSBC’s initiative comes after the Hong Kong authority’s persistent calls for banks and other financial institutions to embrace digital assets, especially cryptocurrencies. Also, the authorities have been requesting financial institutions to offer their financial services to blockchain based firms.

Through offering HSBC cryptocurrency the bank aims to capitalize on the value of gold and the benefits of the blockchain technology. More notably, HSBC has become the first Hong Kong bank to align with the government’s efforts to harness digital token to grow the economy and position the city as an innovation hub. Presently, retail customers can access the digital assets Hong Kong using HSBC's online banking and mobile app platforms.

The bank introduced the HSBC tokenized assets program after getting approval of the Securities and Futures Commission (SFC) of Hong Kong. As a fact, in November 2023 the SEC released guidelines for public offering digital products such as HSBC digital gold.

The HSBC gold tokens are minted on the bank’s Orion blockchain. In November 2023 HSBC entered a partnership with Metaco, a Swiss-based crypto safe-keeping firm, to facilitate its entry into the cryptocurrency market Hong Kong.

In a statement published by Scmp, Maggie NG, HSBC Hong Kong head of wealth and personal banking,[ said](https://www.scmp.com/business/banking-finance/article/3256859/hsbc-launches-tokenised-gold-retail-customers-hong-kong-government-pushes-publicly-accessible " said"), “We are proud that HSBC Gold Token, powered by HSBC Orion, is the first retail product in Hong Kong that is based on distributed ledger technology, as authorized by the Securities and Futures Commission.”

## Tokenized Gold’s Global Value Exceeds $1 Billion in 2023
Through the Hong Kong retail crypto investment HSBC has joined a sector that has other players like <a href="/fr/price/tether-usdt" target="_blank" class="blog_inner_link">Tether</a> and Paxos. By the end of 2023 the global value of tokenized gold has exceeded $1 billion. Tether, popularly known for its USD-backed stable coin USDT, is the leader in this sector. Its tokenized gold coins are valued at more than $500 million. Paxos is the second largest issuer of tokenized gold which is worth more than $400 million.

Other players that are part of the blockchain gold investment sector are Sber, a Russian state-owned bank, Takasbank, a Turkish bank, Reserve Bank of Zimbabwe and WisdomTree, a United States based asset management firm.

Read also: [How to Buy Real World Assets (RWA)](https://www.gate.io/how-to-buy/real-world-assets-rwa "How to Buy Real World Assets (RWA)")

## The Impact of Real-world Asset (RWA) Tokenization 
It is important to note that Real World Assets (RWAs) comprise many tangible and intangible assets which include real-estate, financial contracts and intellectual property. Basically tokenization has many benefits that transcend across various asset classes.

First off, tokenization helps to increase the liquidity of traditionally illiquid assets. This is because tokenization enables investors to buy fractional interests in the asset leading to an increase in its demand and a rise in cash inflow. Therefore, it becomes easier for investors to acquire assets that normally require much capital and often involve complex and lengthy buying processes.

Also, tokenization enables investors to diversify their investment portfolios. As such, many retail investors are able to acquire assets that might be out of their reach. For example, it is difficult and expensive for average investors to buy gold.
However, they can easily acquire tokenized gold available online. Since the tokens exist on the blockchain they are permissionless and available across borders.

Tokenization also enables [real world assets](https://www.gate.io/price/view/real-world-assets-rwa "real world assets") like gold to be traded on various exchanges which unlocks opportunities for investors. In addition, asset digitization finance is accessible throughout the day since there are no time limits for trading. For example, investors can participate in digital gold trading around the clock. 
Also, the transactions of HSBC gold tokens and other digitized assets are secure, auditable and transparent as they are recorded on the public ledger. Such a system increases trust and confidence among investors and reduces the chance of fraudulent activities.

Lastly, tokenization increases transaction efficiency since there is no need to complete cumbersome documents which consumes much time. As a result, it enables instant transaction finality. In all, if the current gold investment trends continue the total market capitalization of the RWA sector may [exceed $4 trillion by 2030](https://www.citigroup.com/global "exceed $4 trillion by 2030").
## Conclusion 
HSBC has become the first bank in Hong Kong to offer gold tokens to retail investors. Its clients can access the tokens on its online banking and mobile app platforms. Tokenization of real world assets enables investors to diversify their investment portfolio. [Tether](https://www.gate.io/price/tether-gold-xaut "Tether") and [Paxos](https://www.gate.io/en/price/pax-gold-paxg/hkd "Paxos") are the leading issuers of tokenized gold. 
## FAQs on Tokenized Gold
### Can gold be tokenized?
Gold can be tokenized through creating gold coins based on the blockchain. HSBC, Tether, Paxos, Sber, a Russian state-owned bank, Takasbank, a Turkish bank, Reserve Bank of Zimbabwe and WisdomTree are examples of institutions that have tokenized gold.
### Can I buy gold from HSBC?
You cannot buy gold directly from HSBC. Instead, if you are in Hong Kong you can buy HSBC gold tokens. Such tokens track the price of gold at all times.
### What is the tokenization sector?
The tokenization sector refers to a group of firms that create tokens that represent various real-world assets. The tokens may represent intangible assets such as intellectual property or tangible assets like gold.
### How does HSBC use the blockchain?
HSBC uses the blockchain to create digital tokens that represent units of gold. The bank mints its gold tokens on its Orion blockchain.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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