HSBC has introduced a platform to tokenise physical gold, enabling digital ownership of gold bullion.

The tokenised gold will be stored in HSBC's London vault and will be tradable on the HSBC gold tokenisation platform, with each token valued at 0.001 troy ounce of gold.

HSBC is aiming to tap into a potential market worth $US525 billion with the new initiative.

Tokenisation space continues to develop, and Blockworks revealed that factors such as a 'flight to quality' which involves a movement away from higher-risk investments towards safer, lower-risk assets like gold, by some investors have driven interest in the bullion. 

In a report from August, gold has been identified as the second-most tokenised asset in terms of market capitalisation, following the US dollar.

HSBC is no stranger to blockchain technology. In December 2021, it has partnered with Wells Fargo to use a shared settlement ledger for processing transactions in multiple currencies.

In November 2022, the bank announced plans to launch HSBC Orion, a tokenisation platform that allows institutions to issue digital bonds.