Multinational banking giant HSBC has revealed plans to issue digital bonds to companies 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, get digital delivery versus payment.

According to 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 ledger.”

Therefore, HSBC Orion is considering the issuance of the first GBP tokenized bond under Luxembourg law.

Once implemented, HSBC Orion will expand to other asset classes and locations.

John O’Neill, Global Head of Strategy for Digital Assets, Markets and Securities Services at HSBC, noted:

“Digital assets are a rapidly growing part of financial markets. Our customers demand solutions that can deliver the benefits of tokenization within a trusted and secure environment.”

As tokenization presents opportunities for fixed income, such as better operational performance and faster processing, HSBC Orion is seen as a stepping stone towards this goal.

O’Neill added:

“We are excited to meet this growing need with the launch of HSBC Orion, our strategic platform for tokenized assets. We plan to use HSBC Orion to facilitate further digital bond issuance and expand its use to other products in 2023.”

For his part, Zhu Kuang Lee noted that HSBC Orion would offer a safe and reliable backbone when it comes to issuing tokenized bonds.

The director of digital, data and innovation at HSBC Securities Services, said:

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

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

HSBC recognized that the use of DLT had the potential to revamp the trade finance industry by reducing transaction times to less than 24 hours from the current five to ten days.

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