Digital assets such as tokenised deposits, which are digital representations of commercial bank money, wholesale central bank digital currencies (CBDCs) and tokenised real-world assets are beginning to move beyond pilots in regulated settings. This transition is supported by greater regulatory clarity and stronger institutional participation. John O’Neill, group head of digital assets and currencies at HSBC, says this shift marks the point where digital finance begins to integrate with the systems that support global markets. Banks and financial market infrastructure providers are deploying blockchain-based platforms that support faster settlement and near real-time payments between regulated institutions. These platforms form the foundation for scalable adoption and signal a wider industry move towards shared digital settlement infrastructure. “2025 is the year the industry moves beyond pilots,” O’Neill says. Recent activity across major initiatives reflects this momentum. Singapore’s Project Guardian, the Monetary Authority of Singapore's (MAS) framework for testing tokenised financial market infrastructure, is advancing regional experimentation. Hong Kong’s mBridge, a multi-central-bank project developing wholesale CBDC settlement rails, is progressing with similar aims. SWIFT’s shared ledger trials, which explore the coordination of global payments through blockchain, demonstrate how established institutions are adapting their systems. These programmes show that public and private financial institutions are testing digital platforms for cross-border use and working on the legal and operational models needed to support them. “When we look back in 2030, we may see it as the point when digital assets became part of mainstream finance,” O’Neill says. Regulation builds the foundation for scale Regulation is now creating the conditions for digital assets to scale. After several years of uncertainty, major financial jurisdictions are setting out clear frameworks for digital money and tokenised assets. These policies give banks confidence to scale practical use cases, including tokenised deposits and digital bonds, which are securities issued and recorded on distributed ledgers. O’Neill says regulation is taking shape in the markets that matter most to global institutions. “We welcome the regulation. It is fantastic for market development and what we have called for over many years,” he says. “Regulation in major financial centres is already in place and that is allowing growth and greater confidence across the market.” Regulators in Asia and Europe are formalising standards for digital currencies and tokenised assets. Singapore’s stablecoin regulatory framework, Hong Kong’s virtual asset licensing regime and the European Union’s Markets in Crypto-Assets regulation define rules for issuance, custody and market integrity. These structures support stability and provide a clearer basis for designing systems that interoperate within established risk and compliance frameworks. O’Neill believes these coordinated efforts are allowing banks to design cross-border systems more easily. “Regulators are moving in the same direction,” he says, “and that coordination makes it easier for us to design platforms that connect across jurisdictions.” Digital money finds balance across three pillars With policy frameworks strengthening, banks and central institutions are defining how different forms of digital money will coexist. O’Neill describes the future financial system as supported by three components: tokenised deposits, CBDCs and regulated stablecoins. “It is not about choosing one form of digital money,” he says. “There is room for all three, and we follow our clients wherever the demand is.” He says CBDCs and tokenised deposits represent digital equivalents of the traditional two-tier structure. “CBDCs are digital central bank money, and tokenised deposits are digital commercial bank money,” he says. This framework extends familiar liquidity models into digital environments and creates layers of value that can interact seamlessly. Clients benefit from a regulated ecosystem in which digital money supports payments, settlement and the movement of assets across platforms. The bank has introduced tokenised deposit products in Hong Kong, Singapore, the UK and Luxembourg. It has also worked with the Hong Kong Monetary Authority on CBDC research, and supports regional experimentation in other markets. Similar initiatives across the industry are progressing, and HSBC’s deployments illustrate one approach on integrating digital finance within compliance frameworks. O’Neill adds that interoperability does not only apply to technology and reflects the ability of institutions to exchange value safely across systems in the same way traditional money already circulates. Gold assets tokenised on digital rails HSBC has also explored tokenised versions of physical assets, starting with gold. O’Neill says the bank’s Gold Token, offered to retail customers in Hong Kong, has recorded over one billion dollars in traded value since its launch. “We believe it is really important to make these solutions easy for our clients to access,” O’Neill says. He explains that integrating the token within the bank’s existing mobile app in Hong Kong was a key factor in uptake. According to HSBC, the product is now the third largest tokenised gold product globally. HSBC divides a gold bar held in its vault into digital units, which clients can trade in small or large amounts. This structure links physical custody to digital settlement systems and provides a model for bringing real-world assets into regulated digital environments. O’Neill says this approach could serve as a model for other offerings, including digital bonds delivered through Orion, HSBC’s issuance and management platform for digital securities. Trust becomes the cornerstone of programmable finance As digital adoption grows, O’Neill says that replicating the level of trust associated with traditional finance remains a central focus. He explains that HSBC integrates regulatory checks such as know your customer (KYC) and anti-money laundering (AML) standards directly into its digital asset systems. “Trust is what our clients come to HSBC for,” he says. “They want innovation that scales but still meets every KYC and AML requirement.” O’Neill says collaboration among banks is essential for interbank transfers and shared infrastructure. He highlights the United Kingdom’s tokenised sterling deposits project, which is developing common payment rails for tokenised deposits. He says partnership between public institutions and private banks is important for developing the market and supporting interbank payments as adoption increases. Liquidity defines the next phase of growth O’Neill identifies liquidity as the most important indicator of whether digital assets succeed. He says recent progress in regulation, trusted digital money, and new market infrastructure has created the necessary conditions for market depth to increase. “Everything comes back to liquidity,” he says. “It is the ultimate test of whether digital assets can succeed.” He expects to see larger payments and broader participation as banks increase adoption across markets. He considers 2025 a foundational year and expects the following years to focus on growing market activity. “Once liquidity builds,” O’Neill says, “it attracts more participants, and liquidity begets liquidity.” He suggests that growing participation could lead to digital assets playing a more central role in financial infrastructure and the movement of value. Across the industry, institutions including JPMorgan, Citi and several central banks are testing tokenised assets and digital money, supported by initiatives such as Project Guardian and SWIFT’s tokenisation trials. While regulatory frameworks are developing, most platforms remain fragmented, and legal certainty for cross-border settlement is still taking shape. The next stage of adoption will rely on sustained liquidity, operational reliability and regulatory alignment. HSBC’s approach, which embeds digital services within existing systems, reflects one possible path, though its impact will depend on how effectively such models scale and connect across markets.
