Hang Seng Investment, a prominent asset manager in Hong Kong, stepped into the ETF market, introducing a gold exchange-traded fund (ETF) alongside a tokenized share of the asset on Ethereum.
The firm launched the gold ETF, physically backed by funds, on the Hong Kong Stock Exchange; however, at the moment, tokenized gold ETF shares are not yet available for trade, and the region’s financial regulators will review the tokenization initiative.
Once completely launched, investors can buy tokenized representations of the gold ETF on the Ethereum blockchain.
Hang Seng’s hybrid approach of supporting traditional finance and digital ledger technology comes amid the growing surge in firms moving to launch tokenized assets. The firm’s gold ETF is also the first physical gold ETF to be issued on the Hong Kong Stock Exchange.
HSBC acts as the tokenization agent
Hang Seng’s gold ETF will have a special class of non-listed fund units on Ethereum. Hong Kong and Shanghai Banking Corporation (HSBC), one of the largest financial firms, will manage the technicalities and regulatory parts for launching the digital tokens on Ethereum.
The digital asset firm is currently diving into Ethereum. In the future, it may launch tokenized gold ETFs on other blockchain platforms, according to reports.
The current scenario, where the gold price is soaring, would be favorable for Hang Seng’s gold ETF. Last year, the global demand for gold hit an all-time high of 5,000 tonnes, according to the World Gold Council (WGC). Currently, the price of one ounce of gold (28 grams) has risen above $5,500.
However, a gold ETF helps common investors who want to buy gold directly. In ETFs, investors do not have to buy the entire gold; instead, they can buy affordable fractions of the fund (gold), and the firm, here, Hang Seng, handles the custody of the funds.
Precious metal ETF tokenization is on the rise amid RWA tokenization
Remora Markets, a tokenized asset platform, recently launched five real-world assets on the Solana blockchain, one of the blockchains that is seeing an increasing number of tokenized assets. The platform rolled out tokenized ETFs for gold, silver, platinum, palladium, and copper on Solana.
Stablecoin issuer Tether’s gold-backed tokens, XAUT, WisdomTree Gold Token (WTGOLD), and PAX Gold (PAXG), are some of the prominent names in the tokenized gold assets niche.
When examining RWA tokenization, the total market cap has risen to nearly $30 billion, which is nearly four times more than the last two years.
