Hang Seng Launches Physically Backed Gold ETF with Tokenization Plan in Hong Kong

Highlights:

• Hang Seng has launched a gold ETF in Hong Kong that is backed by physical bullion stored in local vaults.
• The ETF rolled out the LBMA gold benchmark and does not pay dividends to investors.
• Tokenized fund units are planned on Ethereum with access limited to approved distributors.

Hang Seng Investment Management, a subsidiary of Hang Seng Bank, has rolled out a gold exchange-traded fund in Hong Kong. The fund has begun trading on the Hong Kong Stock Exchange under the stock code 3170. It tracks the LBMA Gold Price AM used across global bullion markets. The ETF follows a passive structure and holds physical gold bars. All bars meet the London Bullion Market Association’s good delivery standards.

Hong Kong just launched the Hang Seng Gold ETF! Backed by real physical gold
First in HK with tokenized units on Ethereum
HSBC handles custody & tokenization
Jumped ~9% on day 1!

Gold + blockchain speed #GOLD #Ethereum #RWA pic.twitter.com/XYzTO7wvXm

— Cryptoryng (@CryptoReinge) January 29, 2026

HSBC acts as the gold custodian for the product. The bank stores the bullion inside designated vaults located in Hong Kong. The structure permits creation and redemption through participating dealers using cash. In limited situations, dealers may also use physical gold. Retail investors trade ETF units on the secondary market like listed shares.

The ETF trades in Hong Kong dollars and applies a board lot size of 50 units. It carries an estimated annual ongoing charge of 0.40%. The fund also reports an estimated annual tracking difference of -0.50%. Hang Seng has stated that the ETF does not intend to distribute dividends. Price movements, therefore, determine all returns.

Gold prices have continued rising during the fund’s initial trading period. Spot gold has climbed about 2.7% and has neared record levels. The move reflects ongoing demand for defensive assets. Market participants have pointed to economic pressure and geopolitical risk as factors supporting interest in physically backed exposure.

https://twitter.com/MeowMeowMews/status/2016821122436583763?s=20

Hang Seng Launches Digital Units Using a Controlled Blockchain Setup

Beyond the listed Gold ETF, Hang Seng has outlined plans for tokenized unlisted fund units. These units remain unavailable and depend on regulatory approval. HSBC has been appointed as the tokenization agent. The bank issues digital tokens representing ownership interests in the fund.

Each token corresponds to one unit or a fraction of a unit. Subscription and redemption records sit on blockchain infrastructure. The prospectus states that the system initially uses the Ethereum public blockchain. Hang Seng has indicated it may adopt other public blockchains later. Any future network must meet similar security standards.

Despite the public blockchain structure, the model applies strict controls. Investors can only subscribe to or redeem tokenized units through approved distributors. The framework does not support secondary market trading. Token holders cannot transfer units between wallets.

Distributors manage token minting and burning activity. Tokens remain with custodians appointed by those distributors. The system enforces access by allowing distributors rather than individual investors. This approach limits direct wallet interaction. The structure reflects institutional custody and compliance requirements.

Market Conditions and Policy Backdrop Frame the Launch

The launch of the Gold ETF has come at a time when the global gold markets have remained strong. During times of fluctuating currencies, investors have increased their gold allocations. The strategic positioning of assets has also been influenced by geopolitical developments.

Meanwhile, banks are experimenting with blockchain infrastructure on traditional assets. Exchanges and asset managers have also announced tokenization programs in equities and funds. Several solutions revolve around quicker settlement and longer trading hours. Hong Kong authorities have been supporting regulated financial experimentation. The Hong Kong Treasury Department issued a third distribution of tokenized green bonds last year. Meanwhile, officials have also issued a few stablecoin licenses in the region despite a high number of applicants.