HSBC Holdings is set to introduce tokenized deposits to its corporate clients in the UAE and the US by the first half of 2026, marking a transformative step in the bank’s adoption of blockchain-based financial technologies. This initiative follows the successful rollout of similar services in Hong Kong, Singapore, the UK, and Luxembourg, underscoring HSBC’s commitment to positioning the UAE as a hub for next-generation financial infrastructure. Tokenized deposits convert traditional fiat balances into secure digital tokens using HSBC’s proprietary Distributed Ledger Technology (DLT). Unlike volatile cryptocurrencies, these tokens represent direct claims on funds held in regulated bank accounts and can accrue interest like standard deposits. Financial experts highlight the system’s ability to enable real-time, 24/7 transactions, eliminating delays tied to cut-off times, batch cycles, or multi-day international processes. For UAE-based companies, this translates to faster cross-border payments and improved liquidity management. Manish Kohli, HSBC’s global head of payment solutions, emphasized that tokenized deposits are becoming a cornerstone of corporate liquidity management. By automating key processes and removing time-based constraints, the system allows treasurers to keep funds active around the clock—a critical capability for firms operating across regions or handling high-volume transactions. The UAE’s fast-growing sectors, including logistics, energy, aviation, and digital commerce, stand to benefit significantly from smoother operations and reduced financing costs. Additionally, the technology offers enhanced risk management, providing companies with real-time visibility into their cash positions and enabling automated, error-free payments. HSBC is also integrating artificial intelligence to assist with liquidity forecasting, automate complex payment chains, and balance accounts without manual intervention. These features are expected to appeal to UAE corporations with regional or global footprints. Unlike stablecoins, which are issued by private entities and often circulate on public blockchains, HSBC’s tokenized deposits operate entirely within a regulated framework, ensuring compliance, transparency, and risk management. While the bank is in discussions with stablecoin issuers to provide settlement and reserve-management services, it has clarified that any decision to launch its own stablecoin would depend on clearer regulatory guidance. HSBC’s move aligns with the UAE’s growing prominence as a global wealth hub and financial innovation center. The bank recently opened its first Middle East wealth center in Dubai, catering to affluent and high-net-worth clients. With projections indicating nearly 10,000 new millionaires relocating to the UAE in 2025, the country’s supportive regulatory environment for digital finance makes it an ideal launchpad for HSBC’s blockchain-enabled banking services. As tokenized deposits go live in 2026, UAE businesses are poised to be among the earliest beneficiaries of a shift toward faster, more efficient, and highly automated financial infrastructure.
HSBC’s tokenised deposit move set to transform banking for UAE clients by 2026
