HSBC Tests Blockchain Deposits for Institutional Finance

HSBC has completed a pilot programme simulating the issuance, movement and atomic settlement of tokenised deposits on the Canton Network.

The pilot programme marks a development in blockchain interoperability and digital payment innovation for institutional clients.

Through its Global Payments Solutions (GPS) business, HSBC tested how tokenised deposits could interact with other digital assets on Canton-enabled applications. The pilot demonstrated connection between HSBC's deposit ledger and Canton's public blockchain framework for regulated institutions.

This marks the first time HSBC's Tokenised Deposit Service (TDS) has been issued and used on a public blockchain.

The pilot achieved atomic settlement – where transactions of tokenised deposits and other digital assets were completed simultaneously – ensuring both sides of a trade are executed instantly and securely.

Building interoperable payment networks

The pilot demonstrates progress in the evolution of tokenisation by enabling interoperability between networks and supporting future-scalable financial ecosystems.

By demonstrating that tokenised deposits can be issued and settled atomically alongside digital assets, HSBC is testing how wider institutional adoption of digital market infrastructure might unfold.

Manish Kohli, Head of Global Payments Solutions at HSBC, says: "This work highlights how tokenisation is evolving within the banking sector and the infrastructure needed to support it at scale."

"Our focus is on building secure, interoperable capabilities that enable clients to move money more efficiently across different environments, while maintaining the trust and regulatory standards expected of a global bank."

Interoperability sits at the core of the pilot's objectives, particularly in allowing the bank's systems to connect with external networks while preserving regulatory compliance and transaction privacy.

Canton Network – co-founded by Digital Asset – is designed as a privacy-enabled, interoperable blockchain for regulated institutions, supporting diverse asset classes and applications.

Tokenised deposits gain institutional momentum

Yuval Rooz, CEO of Digital Asset and Co-Founder of the Canton Network, adds: "Tokenised deposits are gaining traction across capital markets, corporate banking and treasury and Canton is quickly becoming a primary network for deployment, enabling tokenised deposits to move seamlessly across institutions and applications while maintaining privacy, control and interoperability."

The collaboration reflects HSBC's testing of how tokenised deposits could help shape future financial connections between banks, corporates and digital market infrastructures.

The pilot demonstrates how Canton's framework may support HSBC's broader vision for optional connectivity across multiple settlement rails – extending delivery-versus-payment capability across cash and asset legs.

HSBC's work on tokenised deposits forms part of the bank's wider digital asset strategy, which includes previous blockchain initiatives across trade finance and custody services.

Corporate treasury applications emerge

The bank's TDS is positioned as a bridge between traditional and digital finance.

It allows corporate clients to convert fiat deposits into programmable digital tokens on a one-to-one basis, which enhances liquidity management and enables instantaneous settlement directly on HSBC's ledger.

HSBC's TDS supports major currencies including USD, GBP, EUR, HKD and SGD.

The pilot's findings will inform HSBC's infrastructure development for institutional-grade digital finance, particularly as real-time settlement and programmable payment capabilities become standard requirements for global cash management.