HSBC on track to tokenize private placements in Corda

The bank aims to digitize for $ 20 billion of private placements on a Corda blockchain (R3). The balance sheet is now 10 billion. HSBC can then tokenize these assets and develop other financial services.

HSBC announced several months before the launch of Digital vault, its platform blockchain dedicated to monitoring financial transactions carried out on private markets. It is now operational, showing a total of $ 10 billion in digital investments.

And the head of innovation and strategy at the bank, Ciaran Roddy, is already anticipating a dramatic increase in the volume and value of private placements on the platform over the next 12 to 18 months.

From paper to scanning and real-time access

Digitizing this information is only the first step, however. The projectsHSBC indeed go beyond. The bank is also interested in tokenization traditional financial assets.

After recording on his Corda blockchain private placements (stocks or bonds), HSBC therefore plans to tokenize them, allowing their exchange on the platform and real-time monitoring of transactions.

Ciaran Roddy also points out to Coindesk that the first objective of the project is indeed to have information in real time. Demonstrated ambition: "to be able to bring added value to customers by providing them with self-service tools." "

Prerequisites have yet to be met, however. Tokenization will certainly allow HSBC to then deploy smart contracts, but it must first convince the issuers of these placements to adhere to its platform and this model.

Then split and tokenized investments

The regulatory component is also essential. Future tokens must be recognized by regulators as legal and transferable assets. For investor clients, a service like Digital Vault now has the advantage of making information easily accessible.

HSBC clarified that access for these customers is transparent from their online bank account. Section Investments thus contains all the information associated with the transactions stored on the blockchain.

Customers also have the ability to open access to this system and data to third parties, including regulators, but also auditors. HSBC also notes that some of its customers make the platform available to their asset managers.

The bank anticipates a 60% growth in five years in private placementsto nearly $ 8 trillion by 2022. And by developing services in this growing market, HSBC intends to commission part of this value.