Hang Seng Debuts Gold ETF With Tokenized Access on ETH

Hong Kong’s Latest Gold Fund Bridges Traditional Finance and Blockchain

Hang Seng Investment Management launched a physical gold ETF in Hong Kong, and they’re planning to layer blockchain tokenization on top of it using Ethereum.

The Hang Seng Gold ETF went live on the Hong Kong Stock Exchange under ticker 3170. It tracks the LBMA Gold Price AM benchmark. The fund holds real gold bars in Hong Kong vaults, with HSBC handling custody duties.

This launch comes at a moment when gold prices are absolutely ripping. Spot gold jumped another 4% on Thursday, pushing toward $5,530 an ounce. Investors are piling into safe havens as economic and geopolitical worries mount.

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How the Gold ETF Works?

The fund works like most gold ETFs you’ve probably seen. Participating dealers handle creation and redemption, sometimes in physical gold rather than just cash. Regular investors trade shares on the exchange.

Board lots come in chunks of 50 units, priced in Hong Kong dollars. Annual fees run 0.40%, with an estimated tracking difference of minus 0.50%. No dividends are planned, so your returns hinge entirely on where gold prices go.

The structure is straightforward. Physical gold bars meeting London Bullion Market Association standards sit in vaults. You buy shares that represent ownership of that gold. Pretty standard stuff for the category.

Ethereum Blockchain Integration Coming Soon

Now here’s where Hang Seng threw a curveball. They’ve outlined plans for tokenized units of the same fund. These aren’t live yet and need regulatory sign-off first.

HSBC will act as a tokenization agent, minting digital tokens that represent fund ownership. Each token maps to one unit or a slice of one. Subscription and redemption transactions get recorded on a public blockchain.

The prospectus specifically names Ethereum as the initial blockchain. They left the door open for other networks later, provided they match Ethereum’s security and resilience.

But there’s a major limitation. These tokenized units can only be bought or sold through approved distributors. Secondary market trading isn’t happening. That’s a big difference from the regular listed shares, which trade freely on the exchange.

Also Read: Ethereum ETFs Surge Sparks Market Rally — Is ETH the New Institutional Favorite?

Wall Street Joins the Tokenization Race

Last week, the NYSE and its parent company, Intercontinental Exchange, announced they’re building a blockchain platform for tokenized stocks and ETFs. They’re talking about 24/7 trading and near-instant settlement, though that also needs regulatory approval.

Robinhood’s CEO floated the idea recently that tokenized stocks are inevitable. He suggested they could prevent trading freezes like the ones that caused chaos during meme stock volatility.

Binance jumped back into tokenized equities discussions too, five years after their first go at it.

Sygnum put out research suggesting traditional finance is shifting toward blockchain infrastructure. Their co-founder, Mathias Imbach, threw out a prediction that up to 10% of new bond issuance by big institutions might launch in tokenized form during 2026.

Why Hong Kong Investors Might Care?

The standard ETF gives Hong Kong traders a regulated way to get gold exposure without buying physical bars or coins themselves. The 0.40% fee is reasonable for physically backed gold products in the region.

Having the gold stored locally in Hong Kong matters for some investors. It removes cross-border complications if you ever want to redeem for physical metal.

The tokenization piece is trickier to evaluate. It’s not available yet, and when it arrives, the no-secondary-trading restriction limits its appeal. You’re essentially locked into dealing with approved distributors.

Still, it shows where fund managers think the industry is headed. Blockchain rails could eventually mean always-on markets and smart contract functionality. Whether that matters to most gold investors is debatable.

Also Read: Hong Kong to Let Licensed Crypto Exchanges Access Global Liquidity Pools

Gold’s current run reflects real anxiety in markets. Central banks are still buying. Retail demand across Asia stays strong. The metal is doing what it’s supposed to do when uncertainty rises.

Hang Seng is betting that some slice of investors wants traditional gold exposure with a blockchain option on the side. Time will tell if that combination resonates or if the two audiences remain separate.

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