HSBC is the first Bank in the World to offer Tokenised Gold.

HSBC is the first Bank in the World to offer Tokenised Gold.

HSBC has developed this capability by creating a ‘digital twin’ of an existing physical asset – specifically loco London gold that is custodied in HSBC’s vault. Tokenised physical gold can be traded between HSBC and institutional investors through the HSBC Evolve single dealer platform, or through an application programming interface (API).

Each token represents 0.001 troy ounce, and is held against the 400oz bars that HSBC holds in its vaults.

It's not true gold ownership however. Read the small print on the 'Fact Sheet' and it states that gold will be held on an 'unallocated basis', where the amount held is less than one bar. Currently one 400 troy ounce bar would cost you around £920,000.00. That will be unattainable for the regular investor - under the assumption that gold is 20% of your portfolio - that would be a £4.5 million portfolio! If the gold you hold is unallocated, it means that that 0.001 ounce can be sold a hundred times over. So if all clients wanted to liquidate, there wouldn't be enough gold to go around.

This is undoubtedly an incredible technological breakthrough. HSBC has successfully trialled quantum-secure technology for buying and selling tokenised physical gold with Quantum-Safe . This technology is designed to protect digital assets from potential future quantum computing attacks. And Post-Quantum Cryptography (PQC), in which HSBC uses PQC algorithms to secure its gold tokens. These algorithms are designed to withstand attacks by quantum computers, ensuring the long-term security of your investment. No need for security against Quantum attacks if you hold the gold yourself.

Lastly, you can currently only trade the 'physical gold' you have within HSBC and therefore have to take the price they offer if you wanted to liquidate. Nothing comes close to owning your own physical coins or bars.