International banking institution HSBC has initiated work on tokenized deposits to promote digital financial services. Sun Lee, HSBC’s global head of local and innovative payments, stated that the bank is developing its private blockchain platform to be compatible with Ethereum’s EVM (Ethereum Virtual Machine) and ERC-20 standards, considering the global trend toward digital currencies. Although only a small percentage of commercial bank deposits may be tokenized at present, their volume could surpass the current cryptocurrency market significantly. Tokenized deposits involve converting traditional bank deposits into digital tokens on a blockchain, enhancing transparency, security, and transaction speed. Additionally, HSBC is exploring the adoption of public blockchain technology for some customers in the future to offer more advanced and reliable financial services. The bank has also begun discussions with clients about programming applications for introducing tokenized loans, aiming to digitize and automate traditional lending processes, which could boost innovation and efficiency in the financial sector. HSBC’s progress reflects a global trend of financial institutions integrating blockchain and crypto technologies to modernize their services. While this technological evolution promises better financial facilities for users, it also presents security and regulatory challenges that banks must address.
Source: binance
