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HSBC Confirms Talks with Hong Kong Monetary Authority on Tokenized Central Bank Money

HSBC projects tokenized deposits could exceed the value of all cryptocurrencies if scaled, as it explores Ethereum-compatible and programmable loan applications.

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Summary

HSBC's Sun Lei stated that tokenizing just 5%–10% of commercial bank deposits could yield a value surpassing all existing cryptocurrencies. HSBC’s private blockchain uses Ethereum-compatible standards and may incorporate public chain technology. The bank is also discussing programmable applications for tokenized loans with clients, alongside its ongoing talks with the Hong Kong Monetary Authority on tokenized Central Bank Money (CeBM) and long-term investments in tokenized deposits.

Terms & Concepts
  • Tokenized Central Bank Money (CeBM): A digital form of central bank money recorded on a blockchain, designed to complement real-time gross settlement systems.
  • Tokenized Deposits: Bank deposits represented as digital tokens on a blockchain, enabling faster, programmable payments and settlement.
  • Ethereum-Compatible Standards: Technical protocols compatible with the Ethereum blockchain, allowing applications to interact or integrate with Ethereum-based systems.