HSBC is preparing to broaden its tokenized deposit services as part of a larger effort to strengthen its digital payments infrastructure. The bank, which already operates this service in Hong Kong, Singapore, the United Kingdom, and Luxembourg, is expected to introduce the offering to corporate clients in the United States and the United Arab Emirates beginning next year, according to a report from Bloomberg News.
Expanding Coverage Across Currencies and Regions
The bank’s Tokenized Deposit Service is designed to streamline both domestic and cross-border transfers, enabling transactions to settle within seconds at any time of day. Manish Kohli, HSBC’s global head of payments solutions, conveyed in an interview that the broader industry momentum around tokenization, digital currencies, and stablecoins has prompted the bank to increase its commitments in this area. He indicated that HSBC is making substantial investments to support the expansion of digital money solutions.
As part of the upcoming rollout, HSBC plans to add the UAE dirham to its supported currencies in 2026. The bank currently processes payments involving euros, US dollars, pounds, Hong Kong dollars, and Singapore dollars. The expansion into the Middle East is expected to align with the next phase of global deployment, with the launch planned for the first half of 2026.
This strategic move reflects a broader shift within the global financial sector, as numerous banks explore digital asset technologies to improve the speed and efficiency of payments. The initiative also follows the introduction of the GENIUS Act in the United States, which establishes a regulatory framework for stablecoins, reinforcing the importance of regulated digital money tools.
How Tokenized Deposits Work
Tokenized deposits, or deposit tokens, serve as digital representations of traditional bank deposits. They are fully backed by funds held on the issuing bank’s balance sheet and operate on distributed ledger technology, typically involving blockchain systems. Industry analysts have emphasized that this model differs from stablecoins issued by nonbank entities, which are generally held off-balance sheet. Because tokenized deposits remain part of a bank’s regulated liabilities, they continue to fall under standard banking rules governing liquidity, capital, and deposit insurance.
This structure also preserves the strength of the banking system’s deposit base. Analysts have argued that converting deposits into privately issued stablecoins could weaken the money multiplier effect, whereas tokenized deposits avoid this disruption by keeping funds within the traditional banking architecture.
Meeting Corporate Demand for Real-Time Liquidity
The growing interest in tokenized deposits is closely tied to rising expectations among multinational corporations and treasury departments. Companies are increasingly seeking real-time liquidity solutions that support 24/7 settlement cycles. Traditional cross-border payments, which often involve multiple intermediaries and days-long delays, do not meet these evolving operational requirements.
Industry reports have suggested that tokenized deposits offer a practical and immediate way for banks to modernize payment systems without overhauling the existing monetary framework. Analysts have noted that these digital instruments could help financial institutions regain relevance in a payments environment rapidly shifting toward instantaneous settlement.
From a broader architectural perspective, tokenized deposits are seen as a feasible route toward digital cash that preserves the core foundations of the current banking system. As HSBC prepares for its next phase of expansion, the initiative signals the bank’s confidence in tokenized deposits as a cornerstone of future financial infrastructure.