The growing interest of companies and financial institutions in digital assets is prompting banks to develop solutions for issuing such securities. On 4 November, HSBC announced the launch of its proprietary platform called “HSBC Orion” which will enable the issuance of digital securities based on distributed ledger technology, or DLT.
In its launch announcement, HSBC said that the EIB is considering using HSBC Orion to issue the first tokenised sterling bond. The security would be both issued and registered under Luxembourg law.
Emanuele Vignoli, the Luxembourg-based CEO of HSBC Continental Europe, stated: “We are proud that the first issue on this innovative global platform is planned to go-live in Luxembourg. This is a further important step on our digital journey, leveraging our significant custodial expertise as well as state-of-the-art distributed ledger technology.”
‘Native and secure’ tokens
Asif Sherani, managing director and head of DCM Syndicate at HSBC, stated in the announcement: "Tokenisation opens up new opportunities for fixed income issuance, including faster processing and improved operational performance.”
HSBC plans to use HSBC Orion to facilitate new digital bond issues and to expand its use to other countries, according to John O’Neil, global head of digital asset strategy. This will happen as early as 2023.
On the HSBC Orion system, transactions are carried out by exchanging tokens linked to a security for payment. HSBC intends to rely on blockchain technology as a “single source of truth”, with tokens and their settlements being handled “natively and securely”.
In Luxembourg, HSBC operates several entities and service lines, specialising in asset management, securities services, private banking and investment banking. Globally, the HSBC group has $2,985bn in assets under management.
Read the French version of this article on the Paperjam site