HSBC to launch tokenized deposits in US, UAE, stablecoin race heats up

HSBC is the latest major bank to double down on tokenized deposits and stablecoins, planning to launch new products in the United States and the United Arab Emirates next year.

# HSBC to Launch Tokenized Deposits in US and UAE, Intensifying Stablecoin Race

HSBC Holdings, a global banking giant, is doubling down on tokenized deposits and stablecoins as banks worldwide compete to keep pace in the stablecoin race.

According to a Bloomberg report on Tuesday, HSBC Holdings will start offering tokenized deposit services to its corporate clients in the United States and the United Arab Emirates in the first half of 2026.

Manish Kohli, HSBC's Global Head of Payment Solutions, stated that HSBC's Tokenized Deposit Service (TDS) enables clients to complete domestic and international money transfers within seconds, 24/7.

"The topic of tokenization, stablecoins, digital currencies, and digital money has clearly gained so much momentum. We are making a significant bet in this space," Kohli said.

## Tokenized Deposits vs. Stablecoins

Tokenized deposits are digital representations of bank deposits issued by regulated banks on blockchains, allowing for instant 24/7 transfers and programmable payments.

Unlike stablecoins, which are typically pegged to fiat currencies like the US dollar and backed by assets such as government debt, deposit tokens are created using the issuer's balance sheet.

While stablecoin issuers like Circle are not permitted to pay interest on users' stablecoin holdings, one of the key features of tokenized deposits is the provision of interest payments.

Stablecoins vs. Tokenized Deposits: Source: Fireblocks

According to Kohli, HSBC plans to expand the use cases of tokenized deposits in programmable payments and autonomous treasuries—systems that deploy automation and artificial intelligence (AI) to independently manage cash and liquidity risks.

"With almost every large company we speak to, we see a significant theme around treasury transformation," the HSBC executive said.

## HSBC Has Not Ruled Out Stablecoin Launch

The expansion of the product to the US and UAE marks HSBC's latest move, following its debut in Hong Kong in May, where Ant International became the first client to use the TDS solution.

Since then, the bank has rolled out the product in several markets, including Singapore, the United Kingdom, and Luxembourg.

HSBC, UAE, Banks, United States, Stablecoin, Tokenization, Companies Source: Bloomberg Intelligence

HSBC's decision to push forward with tokenized deposits comes as major banks like JPMorgan are also doubling down on the technology.

On November 12th, JPMorgan launched JPM Coin, a deposit token representing US dollar deposits at the bank. The company differentiates the token from traditional stablecoins, with Naveen Mallela, JPMorgan's blockchain executive, emphasizing that deposit tokens operate within the traditional banking framework.

While advancing tokenized deposits, HSBC has not ruled out the possibility of issuing stablecoins.

"This is something we will continue to evaluate," Kohli said, adding: "There are a few things that need to happen, and that is the legal framework needs to become more explicit."

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