HSBC & Standard Chartered complete tokenised deposit deal

Standard Chartered and HSBC have completed a live cross-border tokenised deposit transaction on Swift's blockchain-based ledger, in what the banks described as the first interbank transaction executed on the system.

The deal linked the two lenders' tokenised deposit infrastructure through Swift's ledger, using payment messages exchanged between HSBC and Standard Chartered. The obligations created by the transfer were recorded on HSBC's Tokenised Deposit Service and Standard Chartered's own tokenised deposit platform.

Swift's ledger acted as the orchestration layer. It matched and netted the obligations between the banks before final settlement took place through existing systems, rather than replacing traditional settlement rails.

The transaction is part of a broader push by large banks to test how distributed ledger technology can be used in mainstream payments while keeping transactions within the regulated banking system. Tokenised deposits are digital representations of commercial bank deposits, and banks are exploring whether they can improve cross-border payments and transactions outside normal business hours.

Swift previously said its blockchain-based ledger was ready for initial use, with 17 banks across six continents preparing to pilot live tokenised deposit transactions. The Standard Chartered-HSBC deal is the first live bank-to-bank transaction disclosed on the platform.

How it worked

The exchange relied on Swift's messaging network and ledger to coordinate the transaction between two separate bank systems. The structure is designed to let each institution maintain its own tokenised deposit framework while interacting with another bank through a shared layer for messaging and reconciliation.

For banks and their corporate clients, a central question is whether tokenised deposits can simplify treasury and liquidity management across multiple jurisdictions and counterparties. Cross-border payments often involve cut-off times, fragmented operating hours and differing local systems, complicating the movement of funds for multinational groups.

HSBC said its Tokenised Deposit Service is already live in six markets: Hong Kong, Singapore, Luxembourg, the UK, the US and the UAE. It supports several currencies, including CNH, HKD, SGD, EUR, GBP, USD and AED.

Standard Chartered said its tokenised deposit work is part of a broader digital assets and payments strategy that also includes custody, tokenisation and stablecoin settlement. The bank operates in 55 markets.

"HSBC's interoperability transaction with Standard Chartered via Swift is a landmark moment for the promise of tokenised deposits. It demonstrates how digital money issued by banks can be interoperable across institutions while maintaining the integrity and regulatory oversight of the existing financial ecosystem. Tokenised deposit interoperability underscores how we can bring together different infrastructures to benefit our clients. For corporates, this is about solving real-world challenges, such as moving liquidity around the world across financial institutions, increasing cash visibility and reducing the complexities sometimes associated with traditional cross-border transactions," said Lewis Sun, Head of Digital Currencies at HSBC.

Industry effort

The transaction reflects a broader effort by established financial institutions to adapt blockchain-based systems for practical payment use cases without moving away from regulated bank money. That differs from models based on cryptocurrencies or unregulated digital assets because the underlying claim remains a deposit held within the banking system.

Large international banks have increasingly focused on tokenised forms of money that can move between internal systems, clients and counterparties with more flexible timing. The appeal lies in the potential to extend payment windows and improve visibility over funds, especially for companies operating across time zones.

Even so, the infrastructure remains in its early stages. In this case, final settlement still took place through existing systems, underscoring that much of the current experimentation aims to improve coordination and interoperability rather than immediately replace core payment and settlement arrangements.

That may matter for adoption, as banks and regulators have generally been more comfortable with models that preserve current controls and legal structures. By placing tokenised deposits within a framework tied to existing banking obligations, lenders hope to show that digital ledger-based processes can be introduced without undermining oversight.

"Tokenised deposits are a key pillar of Standard Chartered's digital assets strategy, which aims to build end-to-end solutions that enable our clients to transact, settle and manage tokenised liquidity and value across borders. We are pleased to partner with HSBC on executing the first live transaction on Swift's blockchain-based ledger, marking an important step towards more seamless, always-on financial services. As institutional demand grows for faster, more efficient ways to move liquidity and optimise working capital, interoperable tokenised deposits will play an increasingly important role in helping corporate and institutional clients manage treasury, unlock operational efficiencies and support real-time liquidity management across markets," Mark Willis, Head of Emerging Payments, Transaction Services and Digital Assets at Standard Chartered, said.