HSBC pilots digital structured product issuance in Hong Kong

Pilot transaction tests faster issuance, settlement, and servicing for institutional investors.

HSBC has completed a pilot transaction that issued a structured product on blockchain, marking the bank's first digitally native structured product.

The private placement involved US dollar-denominated notes issued in Hong Kong, with Asia-Pacific digital market infrastructure operator Marketnode supporting the transaction.

According to HSBC, Marketnode acted as the tokenisation agent, enabling the notes to be issued directly on a blockchain. It also served as the digital paying agent, managing payment flows between HSBC and the investor.

The bank said the pilot shows how tokenisation can make the issuance, settlement, and servicing of structured products more efficient.

Suvir Loomba, regional head of securities services for Asia at HSBC and a board member of Marketnode, said the transaction builds on the bank's digital asset initiatives.

"Building on HSBC's work in digital assets and innovation, this issuance demonstrates how we're working with market participants to develop practical, scalable solutions for institutional-grade digital finance," Loomba said.

He added that tokenisation can simplify key steps in a product's lifecycle, including issuance, settlement, administration, and servicing.

Patrick Boumalham, head of institutional sales for Asia at HSBC, said structured products remain an important investment option for institutional and wealth clients in Asia.

"As one of the leading issuers of structured products in Asia, we see clear potential for tokenisation to improve the efficiency of issuance, settlement and servicing, whilst creating a more scalable foundation for future product innovation," Boumalham said.

Marketnode CEO Rehan Ahmed said issuing structured products in a digital format is a step towards helping investors manage more of their portfolios on blockchain.

He added that Marketnode supported the transaction as both the tokenisation agent and digital paying agent.

HSBC said the pilot is part of its broader digital assets strategy and demonstrates how blockchain can be used to improve capital markets processes.