HSBC will expand its tokenized deposit service to corporate clients in the United States and the United Arab Emirates in the first half of 2026, aligning its strategy with concrete timelines and market priorities. The move coincides with growing institutional interest in digital solutions versus stablecoins, signaling a shift toward bank‑issued instruments for real‑time value transfer.
Tokenized deposits are digital representations of bank liabilities issued within the bank’s own ecosystem; they generally operate on private, permissioned chains to maintain control, compliance and integration with existing banking systems. This architecture is designed to preserve the features of traditional deposits while enabling programmability and instant transfer within secure environments.
HSBC already offers its Tokenised Deposit Service in Hong Kong, Singapore, the United Kingdom and Luxembourg and supports a currency basket that includes EUR, GBP, USD, HKD and SGD; with the expansion to the Middle East AED will be added. The geographic footprint and multi‑currency support aim to meet cross‑border treasury needs across regulated markets.
The solution enables intrabank wallet‑to‑wallet transfers in real time, designed to improve liquidity management and accelerate corporate treasury. By shortening settlement cycles, the service targets operational efficiencies that are central to cash management strategies.
A senior team member from HSBC described the potential of these products as “a sleeping giant” ready to transform corporate treasury operations; the institution has also tested bond tokenization and interbank settlement experiments in collaboration with third parties such as Visa and Hang Seng Bank. Ant Group is among the clients that have explored the service to optimize cross‑border payments, indicating early enterprise interest in production‑grade use cases.
Competition, regulation, market projections and practical impacts
HSBC’s expansion is set against competition among major banks (JPMorgan, DBS, BNY Mellon, Citi, among others) developing tokenized infrastructures and cross‑chain interoperability frameworks to challenge the early adoption of public stablecoins. This landscape highlights a convergence between traditional finance and blockchain‑based rails, with banks leveraging their balance sheets and compliance expertise.
On the regulatory front, the emergence of more defined frameworks has been a determining factor: U.S. legislation known as the GENIUS Act and clarifications from authorities such as the FDIC have created operational certainty. The FDIC has indicated that tokenized deposits retain traditional deposit insurance protections up to $250,000 per depositor, which differentiates them from many private stablecoins that generally do not have that protection.
Analysts and studies cited in the industry debate estimate that the stablecoin market could reach $500–750 billion in 18–24 months and stand between $1.9–4.0 trillion by 2030, underscoring the scale of the ecosystem competing with tokenized banking solutions. These projections frame the growth dynamics that banks are addressing with deposit‑token models.
For corporate treasuries, the main immediate advantage is the reduction of settlement windows and greater real‑time visibility; for the financial system, the challenge will be to preserve the “singularity of money” while accelerating innovation.
