Tag: Hsbc

HSBC to Initiate Institutional Digital Assets Custody Service in 2024

by Blockchain News

HSBC Holdings plc has declared its strategic move into the digital asset sphere by announcing its intention to introduce a new digital assets custody service specifically for institutional clients. The service, anticipated to go live in 2024, will be designed to cater to the evolving needs of clients investing in tokenised securities.

The forthcoming custody service will operate in synergy with HSBC’s existing digital asset infrastructure, including the HSBC Orion platform, which is responsible for issuing digital assets, and the recently unveiled mechanism for tokenised physical gold. This suite of services is set to offer HSBC’s institutional clients a comprehensive ecosystem for their digital asset requirements.

To deliver this service, HSBC has partnered with Metaco, a Swiss-based enterprise technology firm. Metaco will integrate its Harmonize platform into HSBC’s digital custody service, ensuring a secure and unified management system for digital assets operations.

HSBC’s venture into digital custody services is a response to the burgeoning demand from asset managers and owners for sophisticated custody and fund administration for digital assets. This development is a part of HSBC’s broader digital, data, and innovation strategy headed by Zhu Kuang Lee.

The bank’s focused approach will be on security tokens, rather than cryptocurrencies such as Bitcoin or stablecoins like Tether, delineating a clear distinction in its digital asset services. Security tokens are essentially digital representations of securities issued and transferred on blockchain technology, a domain where HSBC has been actively scouting talent since early 2022.

This initiative by HSBC is indicative of the financial industry’s gradual but definitive shift towards integrating blockchain and digital assets into traditional banking frameworks.

HSBC’s foray into digital asset custody services for institutional clients reflects the bank’s commitment to digital innovation and its foresight in adapting to the digital transformation of the financial sector. The service, backed by HSBC’s robust platforms and in partnership with Metaco, is set to launch in 2024, signaling a significant move by one of the world’s largest financial organizations into the domain of tokenised securities.

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HSBC approves multi-million-pound bonuses for Silicon Valley Bank UK staff

by Blockchain News

On March 10, the activities of Silicon Valley Bank UK were terminated by order of the Bank of England (BoE), which said that the bank did not provide any “critical services” in support of the financial system. Once this event occurred, HSBC purchased the bank for the very cheap price of one pound. But, just a few days following the purchase, HSBC gave its approval for bonuses of several millions of pounds to be given to workers and top executives of Silicon Valley Bank UK.

It was emphasized by the sources that the bonuses would not have been paid out if Silicon Valley Bank UK had not been purchased in a financially sound manner. The exact amounts of the bonuses that were given to Erin Platts, CEO of Silicon Valley Bank UK, and her senior colleagues are unknown at this time; however, insiders have emphasized that the payments were a signal of HSBC’s confidence in the talent base at Silicon Valley Bank UK as well as an effort to retain key staff.

As a result of the BoE’s announcement that it intends to place Silicon Valley Bank UK into a “bank insolvency procedure,” the bank was required to cease making payments and accepting deposits. Prior to this, Silicon Valley Bank UK was instrumental in the growth and support of the innovative economy in the UK. In the meanwhile, the United States banking arm of Silicon Valley Bank has been taken over by the government. In the meantime, Silicon Valley Bank’s parent company, SVB Financial Group, has filed for protection under Chapter 11 bankruptcy while it searches for purchasers for its other assets.

SVB Group’s chief restructuring officer William Kosturos stated that the Chapter 11 process will allow the group to “preserve value” as it evaluates strategic alternatives for its prized businesses and assets. Kosturos stated that the group will be able to “preserve value” if it goes through with the process. Notwithstanding this, both SVB Capital and SVB Securities will continue to do business as usual, both under the direction of their own separate teams.

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HSBC is looking for a top executive to work with asset tokenization

by Blockchain News

The British multinational bank HSBC, which controls the greatest amount of assets in Europe, has increased its focus on digital currencies in recent years. The financial institution is seeking to hire a senior executive who will focus on asset tokenization.

On January 30, HSBC announced the opening of a post for a GPBW product director of tokenization, and the deadline for applications was set for February 13. According to the description of the role, the “tokenization director” would be responsible for “creating and executing” a worldwide tokenization offer as well as representing the bank in front of regulators and the digital assets ecosystem.

The applicant has to be familiar with digital assets, particularly asset tokenization and custody, and have “deep insights” into the sector as a whole as well as the important wealth markets in various geographical locations.

This signifies the acceleration of HSBC’s interest in digital currencies, which had previously been represented in a number of cooperation between the two companies. The bank began offering its rich customers in Singapore and Hong Kong a metaverse investment product in April 2022. The target audience for this investment was the metaverse. Earlier, the company became a member of the Global Markets Advisory Committee of the United States Commodity Futures Trading Commission.

However, the most significant area of interest for HSBC is the expansion of digital currencies used by central banks throughout the world (CBDCs). Noel Quinn, the CEO of HSBC Group, provided an overview of the company’s commitment to supporting digital currencies issued by central banks in September 2021. However, he emphasised concern over the dangers connected with cryptocurrencies and stablecoins.

The British bank was a participant in the proof-of-concept CBDC project that was run by the Federal Reserve Bank of New York for a period of twelve weeks. It was present during the unveiling of the Universal Digital Payment Network, which is a platform for distributed ledger technology (DLT) that would serve a role comparable to that of the SWIFT network for banks, but for stablecoins and CBDCs instead. Additionally, HSBC is one of the 14 commercial and central banks who are working together with SWIFT to test transactions including CBDCs and tokenized assets on preexisting financial infrastructure.

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HSBC to Issue Digital Bonds to Institutional Investors through Tokenization Platform

by Blockchain News

Multinational banking giant HSBC has revealed plans to issue digital bonds to corporates and financial institutions through its new proprietary tokenization platform called HSBC Orion.

By harnessing the power of distributed ledger technology (DLT), HSBC Orion will enable token-based transactions. As a result, attain digital delivery versus payment.

 

Per the report:

“The platform leverages blockchain technology as a ‘single source of truth,’ whereby asset and settlement tokens sit natively and securely on the platform’s ledger.”

Therefore, HSBC Orion is eyeing the issuance of the first-ever GBP tokenized bond in accordance with Luxembourg law.

 

Once rolled out, HSBC Orion will be expanded to other asset classes and locations.

 

John O’Neill, HSBC’s global head of digital asset strategy, markets, and securities services, pointed out:

“Digital assets are a fast-growing part of financial markets. Our clients are demanding solutions that can deliver the benefits of tokenization within a trusted and secure environment.”

Since tokenization presents opportunities for fixed income like improved operational performance and faster processing, HSBC Orion is deemed a stepping stone towards this objective.

 

O’Neill added:

“We are excited to be meeting this growing need by launching HSBC Orion, our strategic platform for tokenized assets. We plan to use HSBC Orion to facilitate further digital bond issuance and expand its usage to other products in 2023.”

On his part, Zhu Kuang Lee noted that HSBC Orion would offer a secure and trusted backbone when it comes to the issuance of tokenized bonds.

 

The chief digital, data, and innovation officer at HSBC Securities Services, said:

“We believe that tokenization solutions complement and expand HSBC’s best-in-class custody and asset servicing capabilities, and we plan to widen our support for digital assets in 2023.”

Meanwhile, HSBC recently conducted a blockchain-based trade finance transaction between SAIC Motor, a Chinese car manufacturer, and Taajeer Group, the exclusive agent for MG cars in Saudi Arabia, Blockchain.News reported.  

 

HSBC acknowledged the use of DLT had the potential to revamp the trade finance sector by slashing transaction times to less than 24 hours from the present five to ten days.

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HSBC Undertakes Blockchain-based Trade Finance Transacntion for Automotive Sector in the Middle East

by Blockchain News

Through the Contour platform, HSBC conducted a blockchain-based trade finance transaction between SAIC Motor, a Chinese car manufacturer and Taajeer Group, the exclusive agent for MG cars in Saudi Arabia. 

With its help from the Contour platform, it would significantly increase the speed of dealing with paperwork. HSBC noted that by using distributed ledger technology has the potential to revamp the trade finance sector by slashing transaction times to less than 24 hours from the present five to ten days.

Per the announcement:

“The Contour platform enabled end-to-end digitisation of the credit documentation required for Taajeer to import a shipment of cars from SAIC in a process that is up to 10 times faster than using physical documents.”  

Chaker Zeraiki, the head of global trade & receivables finance at HSBC UAE, stated:

“Our digitizing at scale means making customers’ lives easier and, with Contour it means we’re cutting costs, reducing risk and speeding up trade. Bringing these benefits to the automotive sector and Saudi Arabia are a measure of our international connectivity and our global leadership in trade banking.” 

Contour seeks to digitize the worldwide trade finance industry worth $53 billion through decentralized technology by integrating digital networks across present fragmented ecosystems and trade routes as a blockchain trade finance network.

Carl Wegner, Contour’s CEO, pointed out:

“This transaction marks an important milestone in the Middle East’s automotive sector, proving that distributed ledger technology is successfully transforming the trade finance ecosystem.”

The blockchain-powered trade finance transaction is a first of its kind on Saudi Arabian soil, and it is seen as a stepping stone towards the nation’s Vision 2030 initiative of becoming a regional trade hub. 

HSBC has emerged as a notable facilitator of blockchain-based trade transactions. 

For instance, the leading British multinational investment bank and financial services holding company partnered with Wave to execute a blockchain-powered trade between China and New Zealand, Blockchain.News reported. 

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Catheon Gaming Named Top Blockchain Firm in APAC Region

by Blockchain News

Catheon Gaming, an Australian-based blockchain gaming and entertainment company, has been named as one of the leading emerging giants in the Asia-Pacific (APAC) region, according to the latest joint first report by KPMG and HSBC.

On Monday, July 18, KPMG & HSBC published their joint report entitled ‘Emerging Giants in Asia Pacific,’ which took a look into a comprehensive analysis of new economy businesses (such as fintech, biotech, software as a service (SAAS), etc.,) across the region, which they consider are making a lasting impact on the global business landscape now and over the next decade.

KPMG and HSBC’s joint report ranked Catheon Gaming as one of the top 10 emerging giants in Asia Pacific, the No. 1 emerging giant in the blockchain sector in the region, and the No. 1 emerging giant in Hong Kong.

William Wu, Founder & Co-CEO of Catheon Gaming, talked about the development and said: “We are honoured to be selected by KPMG & HSBC as one of the 10 leading Emerging Giants in Asia Pacific. We are humbled that our efforts are being recognized, and we are proud to contribute to the growth of the region, which has given rise to some of the world’s most innovative and forward-thinking companies in the gaming and blockchain space. We have a firm belief that gaming will be the key driver in accelerating blockchain mass adoption, and we will continue our relentless drive to achieve this vision”.

The result came after KPMG & HSBC studied 6,472 technology-focused startups with valuations up to US$500 million in 12 key markets (Mainland China, India, Japan, Australia, Singapore, South Korea, Hong Kong (SAR), Malaysia, Indonesia, Vietnam, Taiwan, and Thailand) in Asia to identify the top 100 firms most likely to emerge as potential unicorns.

Consideration for these lists was based on estimated valuations and venture capital obtained as well as KPMG and HSBS analysis on the future growth potential of such firms.

From this larger pool of companies, the report identified the leading 10 emerging giant companies for each of these 12 markets as well as the overall leading 100 emerging giants in Asia pacific. And out of that, Catheon Gaming was ranked as No.8 out of 100 emerging giants in the APAC region.

 

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Trade Finance Platform We.Trade on the Brink of Liquidation, Report says

by Blockchain News

We.trade, a trade finance platform, established as a joint venture among multinational firms, including 12 banks is on the brink of liquidation, The Independent.ie reports.

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The Irish startup has notably sent a notice of liquidation to its employees and it is calling for a creditors meeting next week where it may appoint a liquidator from one of the Big Four auditing giants, PwC.

The move to liquidate the startup stems from its growing loss records with the Independent reporting that the startup lost as much as $8.6 million (8 million Euros) in the 2020 financial year. Founded in 2017, We.Trade has garnered interest from the likes of IBM which joined the firm back in 2020 as it was expanding its blockchain strategy at the time.

There are as many as 12 banks that are part of the We.Trade joint venture, including HSBC, became the first banking institution to finance a trade using the Hyperledger Fabric. The inaugural interests from We.Trade stirred the startup to secure as much as 5.5 million Euros back in 2021, and the failure to secure additional funding has led to the complications stirring a liquidation at this time.

The We.Trade disintegration will not be the first of its kind in the blockchain world as Meta Platform Inc’s Diem Project was also unable to see the light of day due to excessive regulatory pressures with respect to its stablecoin creation plans. Earlier this year, the Diem project, which started out as Libra but later rebranded, announced its asset sale as it made a move to close shop and sell off its intellectual properties.

Silvergate Bank acquired the IP as Meta Platforms also sought avenues to pay off investors who had injected resources into the project from inception to that point.

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HSBC and IBM create successful multi-ledger CBDC demo

by Cointelegraph

On Thursday, HSBC and IBM announced the successful test of an advanced token and digital wallet settlement between two central bank digital currencies, or CBDCs, in a cloud environment. The experiment consisted of transactions between CBDCs, eBonds, and forex. IBM’s Hyperledger Fabric and enterprise technology provider R3’s Corda served as the basis of the distributed ledger facilitating the transactions.

The project was overseen by central bank Banque de France as part of a series of tranche projects to implement a digital Euro. Previously the French and Swiss central banks reported positive results on a pilot run of the digital Swiss Franc and Euro. Nevertheless, the two financial institutions issued caution on the subject, citing regulatory concerns.

Mark Williamson, managing director of GFX eRisk, partnerships & propositions at HSBC, said:

Interoperability across different distributed ledgers and technologies was key in demonstrating how to save time, reduce market risk and improve security for transactions between central banks, commercial banks, and in time our clients around the world.

Likhit Wagle, general manager of global banking & financial markets at IBM, added:

As central banks around the world begin to explore the potential for CBDC to bring greater transparency and security to financial transactions, this initiative provides a comprehensive roadmap.

Across the world, CBDCs are gaining traction in part due to their utility as a means to combat the rises of stablecoins, which, to some, represent a threat to the financial system. This month alone, Australian Reserve Bank’s Project Atom CBDC research uncovered numerous benefits. Around the same time, Kazakhstan’s central bank reported positive results on its CBDC pilot project. The Eastern Caribbean CBDC expanded to two other countries, and Russia is prioritizing the development of a digital Ruble.