TLDR
- HSBC will launch tokenised deposit services in the United States and the United Arab Emirates by mid-2026.
- The bank first introduced the Tokenised Deposit Service in Hong Kong in May 2025.
- HSBC plans to expand this product to support programmable payments and autonomous treasury systems.
- Tokenised deposits are issued on blockchain using the bank’s balance sheet and support 24/7 transfers.
- Unlike stablecoins, tokenised deposits can offer interest payments to corporate clients.
HSBC will launch its Tokenised Deposit Service (TDS) in the United States and the United Arab Emirates by mid-2026. The bank already introduced the service in Hong Kong earlier this year and plans global expansion. HSBC aims to offer faster cross-border transactions for corporate clients through blockchain-issued deposit tokens.
HSBC Bets on Blockchain-Based Tokenised Deposits
HSBC confirmed it will extend its TDS product to new regions in response to client demand for faster, programmable payments. The bank launched the product in Hong Kong in May and has since expanded it to Singapore, the United Kingdom and Luxembourg. In the next phase, it will cover corporate clients in the U.S. and UAE.
Manish Kohli, HSBC’s global head of payments solutions, said, “We are making big bets in this space.” He added that tokenisation and digital currencies are moving forward rapidly. Kohli also emphasized the need to keep pace with client expectations for real-time financial infrastructure.
The TDS solution provides instant domestic and international transfers, operating 24/7 on blockchain rails. This model differs from legacy systems that run during fixed banking hours. HSBC intends to automate treasury functions using this infrastructure in future phases.
Deposit Tokens Gain Momentum Over Stablecoins
HSBC has chosen to prioritise tokenised deposits over launching a stablecoin product. Deposit tokens are backed by the issuing bank’s balance sheet, unlike stablecoins, which are supported by external assets. They also allow banks to pay interest, something restricted under current stablecoin regulations.
Kohli clarified, “It’s something that we would continue to evaluate,” when asked about the possibility of launching a stablecoin. However, he mentioned that the legal environment must first become more structured. HSBC prefers to develop within existing regulatory frameworks.
Unlike stablecoins, deposit tokens align with traditional banking systems. They offer programmable payments and integrate easily with internal treasury systems. This structure appeals to large enterprises with complex payment and liquidity needs.
JPMorgan and HSBC Advance in Tokenization
JPMorgan has also introduced its own deposit token called JPM Coin, released earlier this month. JPM Coin supports real-time settlements and is backed by customer deposits held at the bank. It operates only within JPMorgan’s infrastructure and is not open to the general public.
JPMorgan’s blockchain executive, Naveen Mallela, stressed that deposit tokens are designed for traditional institutions. He said they differ fundamentally from retail-focused stablecoins. This positioning reflects a growing divergence in the market.
HSBC’s move reflects a broader trend in banking infrastructure upgrades. By targeting treasury operations, HSBC focuses on high-value applications. The bank continues to expand its blockchain services across multiple regions.
HSBC to Offer New Treasury Capabilities Using TDS
HSBC will use TDS to support its clients’ autonomous treasury systems. These systems will use AI and automation to manage liquidity and cash flow. The goal is to reduce manual processes and improve operational efficiency for enterprises.
The bank sees increasing interest from multinational clients in transforming treasury management. Kohli stated, “Nearly every large company… we are seeing a big theme around treasury transformation.” This trend is shaping HSBC’s investment decisions in digital banking tools.
TDS will also enable programmable payment workflows, allowing firms to automate financial operations. HSBC expects the system to integrate with enterprise resource planning software. This will create seamless, end-to-end treasury functions across borders.
Legal Framework Remains a Key Barrier to Stablecoin Plans
HSBC has not ruled out issuing a stablecoin in the future. However, the bank is waiting for more straightforward legal and regulatory guidelines. Kohli indicated that the decision depends on how the global landscape evolves.
For now, HSBC is investing in tokenized deposits as a more aligned and viable solution. The bank prefers to innovate within current banking regulations. This provides security and confidence to its global clients.
The bank’s position may shift if laws adapt to support stablecoin issuance by licensed banks. Until then, HSBC remains focused on expanding TDS. The subsequent regional rollouts are scheduled for the first half of 2026.
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