HSBC Launches Tokenized Gold Trading Platform

According to Blockworks, London-based financial giant HSBC has launched a tokenized gold trading platform, allowing clients to trade digital representations of their physical gold holdings. The platform uses distributed ledger technology (DLT) to create a permissioned digital representation of clients' physical gold holdings, with one token equivalent to 0.001 troy ounce. Tokenized physical gold can be traded between HSBC and institutional investors through the HSBC Evolve platform.HSBC has previously utilized blockchain technology, partnering with Wells Fargo in December 2021 to use a shared settlement ledger for processing transactions in various currencies. In November 2022, the bank announced plans to launch HSBC Orion, a tokenization platform for institutions to issue digital bonds. John O'Neill, HSBC's head of digital assets strategy, markets and securities services, stated that there is growing demand for tokenization solutions linked to real-world use cases, such as gold.The launch of HSBC's gold tokenization platform comes as the tokenization space continues to evolve and macro factors drive some investors towards gold. Gold is the second-most tokenized asset in terms of market capitalization, following USD, according to an August report by RedStone Chaos Labs. Tokenized gold is also offered on WisdomTree's blockchain-enabled consumer app, which launched in July. HSBC's gold tokenization launch aims to create a world-leading set of digital asset capabilities, according to O'Neill.