HSBC Brings UAE Dirham onto Blockchain with Live Tokenized Deposit Service

HSBC Bank Middle East Limited has launched a live tokenized deposit service in the UAE, adding the UAE dirham to its HSBC Orion blockchain network. This move enables eligible corporate clients to access cross-border liquidity instantly and around-the-clock.

The dirham becomes the sixth fiat currency on Orion, joining the euro, British pound, US dollar, Hong Kong dollar, and Singapore dollar. Tokenized deposits work by representing a conventional bank deposit as a digital token on a permissioned blockchain, allowing for fast and programmable transactions while keeping the underlying funds within the regulated banking system.

HSBC's Orion network has been used in previous instances, such as powering a $1.3Bn-equivalent multicurrency digital green bond issuance for the Hong Kong government. The company plans to extend Orion to additional jurisdictions and layer programmable payment and treasury automation capabilities on top of the deposit infrastructure.

According to Mohamed Al Marzooqi, chief executive officer of HSBC UAE, 'The introduction of tokenized deposits to the UAE is a reflection of the maturity of the local regulatory environment when it comes to digital finance and the genuine demand from corporates operating in and through this market for more capable treasury tools.'