With the London Metal Exchange (LME) advancing plans to turn Hong Kong’s warehouse metals into digital assets for trading, the city has unveiled separate plans for the tokenisation of gold itself.
The planned gold token will represent a standard 400-ounce gold bar, referencing HAU, Hong Kong’s ticker for gold prices.
The news comes as Hong Kong continues to position itself as a global hub for precious metals trading.
Financial institutions within Hong Kong have been expanding their use of digital assets and distributed ledger technology in trading, with some noting cross-bank tokenised gold transactions having already been completed.
Ant Digital Technologies — the technology arm of Chinese fintech leader Ant Group — said on Monday 2 November that its platform Anvita fulfilled a cross-bank transaction under Project Ensemble, the financial market infrastructure for tokenisation.
In this transaction, Zhaojin Mining (HKG:1818) issued the gold while China Construction Bank (Asia) served as custodian and paying bank. The Bank of East Asia and Jetco received the funds.
Ant highlighted the innovation of the blockchain-based digital certificate for physical gold, which seamlessly records all property rights transfers on a ledger without changing how banks manage their gold accounts.
These transfers occur instantly via tokenised deposits utilising Hong Kong’s real-time gross settlement system.
Also on 2 November, China Citic Bank International (CNCBI) and the Hong Kong Gold Exchange noted that they also completed a pilot test of tokenised deposits for gold trading. In the test, CNCBI’s tokenised platform facilitated round-the-clock settlement across time zones by connecting with other banks through Project Ensemble.
CNCBI plans to fully launch this service in 2027.
These tests coincide with the Hong Kong Monetary Authority announcing this week the advancement of Project Ensemble to its next phase, with tokenised central bank money serving as the foundation for round-the-clock interbank settlement.
Project Ensemble is focused on bringing tokenised gold from experimentation to the real world, with analysts noting that the tokenisation of gold bars provides meaningful advantages to the city’s position as a gold bullion hub.
Write to Amy Rotman at Mining.com.au
Main image: Unsplash
