In the week of 28 September 2026 the HKSAR Government priced about HK$20 billion of digital green bonds, its fourth tokenised issue since 2023. Investors in the Hong Kong dollar tranche could pay in tokenised bank deposits through the HKMA’s EnsembleTX, alongside conventional settlement and tokenised central bank money. The bonds run on HSBC Orion, a private ledger, so this changes nothing for public chains. On Ethereum, the Foundation published client releases for Glamsterdam’s Sepolia activation on 6 October.

Hong Kong’s fourth digital green bond

The HKMA release of 29 September lists four tranches, priced on 28 September: HK$5.5 billion for two years at 3.80 per cent, RMB 7.5 billion for five years at 1.65 per cent, US$200 million for three years at 5.023 per cent and EUR 450 million for four years at 3.734 per cent. Subscription ranged from 1.3 to 11.3 times across the four currencies. The Central Moneymarkets Unit (CMU) clears and settles the bonds at T+1, with HSBC Orion as the digital assets platform, and the bonds are listed on the Hong Kong Stock Exchange.

For the HKD tranche, investors had three ways to pay: the conventional settlement rail, the tokenised central bank money option added in the third issue in November 2025, and tokenised deposits through EnsembleTX, the pilot phase of Project Ensemble. The HKMA calls it the first digital bond to integrate tokenised HKD deposits. The issue also follows version 2.0 of the International Capital Market Association’s Bond Data Taxonomy, a machine-readable format for a bond’s terms.

In the same release the Financial Secretary, Paul Chan, said the Government “will continue to issue tokenised bonds on a regular basis”. The Pilot Scorecard entry names a fourth issue as evidence that would support a move from pilot to production.

The release does not say:

• How much of the HKD tranche settled in tokenised deposits, or which banks’ deposits were used.
• How the bank-to-bank leg settled.
• Whether coupons and redemption will run on the platform. The HKMA’s 2023 report said maturity redemption was still to be tested, and the Scorecard has found no source showing it has been.

India answered the same question differently. Under Demat 2.0, the bond stays on the depository register and the cash leg settles only in the RBI’s wholesale CBDC, through the Unified Markets Interface, at the same moment as the bond. Under the Hood explained that design on 29 September.

India’s design keeps commercial bank credit out of settlement entirely: every Demat 2.0 trade settles in central bank money (SEBI release). Hong Kong lets a tokenised deposit, a claim on one bank, pay for a sovereign bond. In practice the gap is narrower than it looks, because Hong Kong banks have settled with each other in central bank money through RTGS since EnsembleTX launched. No document confirms that this issue settled the same way.

Technology

On 28 September the Ethereum Foundation published its Glamsterdam testnet announcement, with execution and consensus client releases for Sepolia. Activation is at epoch 353,024 on 6 October 2026, 13:53:36 UTC. Hoodi and mainnet dates “have not yet been decided”. The post asks contract developers to test contracts and gas estimation against the new pricing, and warns that contracts relying on fixed gas stipends, hardcoded gas limits or assumptions about remaining gas may need changes. Weekly Brief No. 4 lists the pilots on this site whose contracts run on Ethereum mainnet.

What to watch

• Glamsterdam on Sepolia on 6 October, and the Hoodi go or no-go decision on 8 October (ACDT #97).
• MAS’s stablecoin consultation closes on 16 October 2026 (Wire).
• CMU OmniClear’s digital asset platform, due this year, and CBDC settlement on EnsembleTX around year-end (Policy Address, paras 35 and 50).

Both instruments are Hong Kong dollars or US dollars on a ledger, and both move between wallets at any hour. The difference is whose debt the holder owns. A tokenised deposit is money the bank owes its customer, recorded on a ledger instead of a core banking database, and the bank can lend against it as it lends against any deposit. A licensed stablecoin is money a separate issuer owes the holder, backed one for one by cash and short government debt held on trust, which the issuer may not lend. Hong Kong and Singapore regulate the two under separate regimes.

The problem

Banks in Hong Kong and Singapore now offer both instruments, sometimes from the same group. HSBC launched a Tokenised Deposit Service for corporate clients in Hong Kong in May 2025 (pilot entry). On 10 April 2026 the Hong Kong Monetary Authority (HKMA) granted HSBC one of the first two stablecoin issuer licences under the Stablecoins Ordinance (Wire). HSBC says it will issue a Hong Kong dollar stablecoin in the second half of 2026 through PayMe and its mobile banking app (HSBC release, 10 April 2026). The other licensee, Anchorpoint Financial, is a Standard Chartered subsidiary (pilot entry).

For a treasurer choosing a settlement asset, a fund deciding what to hold, or a regulator writing capital and conduct rules, the two look alike on the screen. Hong Kong’s Securities and Futures Commission (SFC) treats them alike in one place: its May 2026 circular takes both licensed stablecoins and tokenised deposits out of the rules for crypto funds (Wire). The Monetary Authority of Singapore (MAS) is consulting until 16 October 2026 on the law for its stablecoin licence (Wire), and it excluded tokenised deposits from that framework in 2023. The question is what the holder, the bank and the regulator each get from one rather than the other.

How it works

Some terms first. A ledger is a record of who holds what. A token is an entry on a ledger that represents one unit of an asset and moves between accounts under rules written into the ledger. A wallet is the account on the ledger that holds tokens, controlled by a cryptographic key. Settlement is the transfer that discharges a payment obligation, and finality is the point after which it cannot be reversed. Reserves are the assets a stablecoin issuer holds to pay holders back.

A tokenised deposit payment

Follow the first cross-bank transfer HSBC reported in the HKMA’s EnsembleTX pilot. On 13 November 2025 HSBC moved HKD 3.8 million of tokenised deposits for Ant International from its wallet at HSBC to its wallet at another Hong Kong bank (HSBC release).

1. Before the payment. Ant International holds a deposit at HSBC. On HSBC’s own ledger, part of that deposit is recorded as tokens in a wallet. HSBC has not named the ledger technology (pilot entry). ChinaAMC (HK), which uses the same HSBC service for its fund’s deposits, says such tokenised deposits remain conventional bank deposits in all legal and prudential respects (ChinaAMC release, 21 September 2026). The tokens are an HSBC liability, and the cash behind them is whatever HSBC has done with it: loans, securities, reserves at the HKMA.

2. The transfer. HSBC’s service connects to an HKMA-run interoperability layer that links banks’ tokenised deposit platforms (HSBC release). HSBC debits Ant International’s tokens, and the receiving bank credits new tokens to Ant International’s wallet there. HSBC’s deposit liabilities fall by HKD 3.8 million and the receiving bank’s rise by the same amount.

3. Interbank settlement. HSBC now owes the receiving bank HKD 3.8 million. The HKMA says interbank settlement of EnsembleTX transactions runs initially through the HKD Real Time Gross Settlement (RTGS) system, where banks hold accounts with the HKMA, and will move to tokenised central bank money on a 24/7 basis (HKMA release, 13 November 2025). When the RTGS transfer completes, the payment is final in central bank money. The Bank for International Settlements (BIS) describes this as the core of the two-tier system: the payer’s account is debited, the payee’s is credited, and the banks settle on the central bank’s balance sheet (BIS Annual Economic Report 2025, chapter III).

4. Redemption. A tokenised deposit is redeemed by turning it back into an ordinary deposit at the same bank, or by paying it out through the usual channels. No reserve pool is sold, because the token was the deposit all along.

A stablecoin payment

Follow a payment in HKDAP, Anchorpoint’s Hong Kong dollar stablecoin, issued on Ethereum mainnet (pilot entry).

1. Issuance. A corporate client of an authorised distributor, such as OSL or Standard Chartered (pilot entry), pays Hong Kong dollars from its bank account. Anchorpoint mints HKDAP to the client’s wallet, which a distributor must first have whitelisted (Anchorpoint user alert). HKMA rules require the issuer to accept funds only from bank accounts in the customer’s name and send tokens only to wallets registered to the customer (HKMA guideline on licensed stablecoin issuers, para 6.5.9). The Hong Kong dollars go into the reserve pool.

2. The reserve pool. The pool must be worth at least the par value of all HKDAP in circulation at all times (para 2.2.1). It may hold only cash, bank deposits of up to three months, government and central bank debt maturing within a year, overnight reverse repos against such debt, and funds that hold only these (para 2.3.1). It must be segregated from the issuer’s own assets under a trust (paras 2.5.1 and 2.5.2). Anchorpoint’s reserves are held on trust by Standard Chartered Trustee (Hong Kong) (pilot entry). The issuer may pay holders no interest (para 2.6).

3. The transfer. The client sends HKDAP to a supplier’s wallet. The token contract on Ethereum checks that both wallets are whitelisted, debits one and credits the other. Anchorpoint’s balance sheet does not change and the reserve pool is untouched: the same liability now has a different holder. No bank and no central bank takes part in the transfer. On Ethereum, a transfer is final when the block containing it is finalised by the network’s validators (ethereum.org: proof of stake).

4. Redemption. The supplier sends HKDAP back through a distributor. Anchorpoint burns the tokens, draws on the reserve pool and pays Hong Kong dollars to the supplier’s registered bank account. The HKMA expects valid redemptions to be processed within one business day (para 3.3.3). If the issuer fails, holders have the right to have the reserve pool sold and shared pro rata, and to claim any shortfall from the issuer (para 3.3.1).

Side by side

Deposit insurance is less clear. Hong Kong’s Deposit Protection Scheme protects deposits in personal and company accounts up to HK$800,000 per depositor per bank, and excludes virtual assets (Deposit Protection Board). Its published coverage rules do not mention tokenised deposits. The Stablecoins Bill added stablecoin reserve deposits held at a bank to the scheme’s list of deposits it does not protect (Stablecoins Bill, Schedule 8, Part 2).

Why it is built this way

The two designs answer different questions about who carries the risk.

A tokenised deposit keeps the bank in the middle. The deposit funds the bank’s lending, so the bank keeps its funding base and its interest margin, and the regulator keeps the supervisory tools it already has: capital, liquidity and resolution rules. The Basel Committee’s standard on banks’ cryptoasset exposures reflects this. It puts tokenised traditional assets in Group 1a and treats them like the untokenised asset, and puts stablecoins in Group 1b, open only to stablecoins from supervised issuers that pass a redemption risk test (BIS Financial Stability Institute summary).

A stablecoin separates payment from lending. The reserve rules mean the holder’s money cannot fund loans, so the holder does not rely on the issuer’s credit quality, only on the reserve pool and the trust. The cost is what the BIS calls a cash-in-advance constraint: every new stablecoin requires full payment upfront, whereas a bank can expand its balance sheet to meet payment needs (BIS Annual Economic Report 2025, chapter III). The issuer earns the yield on the reserves and pays the holder nothing.

Singapore’s regulator drew the line on these grounds. In its 2023 response, MAS noted respondents’ view that tokenised bank liabilities follow the fractional reserve banking model while stablecoins are fully collateralised, and it excluded tokenised bank liabilities from the stablecoin framework because of the differences in their value-stabilising mechanisms and the risks they pose to holders (MAS response, 15 August 2023, paras 2.12 and 2.14). Hong Kong did the same in its statute: a deposit under the Banking Ordinance is not a stablecoin (Stablecoins Bill, clause 3(2)(e)).

HSBC runs both, and its own account is that each serves a different customer. Its release sets the stablecoin for retail and merchant payments through PayMe and its mobile app, plus tokenised investment subscriptions, alongside tokenised deposits for corporates and digital bonds for institutional investors (HSBC release, 10 April 2026). Nothing in the rules enforces that split: a corporate can hold a stablecoin, and a bank can offer tokenised deposits to retail customers.

There is also a defensive reason. Money that a customer moves out of an HSBC deposit into another issuer’s stablecoin leaves the group. Money moved into HSBC’s own stablecoin stays with HSBC, even if it no longer funds loans. No HSBC or HKMA document describes this motive; it is an inference from HSBC holding both licences, and HSBC has published no volumes for either product that would show deposits moving.

In our markets

Hong Kong is the only one of the three markets with both instruments live or licensed. HSBC’s Tokenised Deposit Service runs for corporate clients and has been connected to EnsembleTX since November 2025 (pilot entry). Seven banks take part in EnsembleTX, and the HKMA plans CBDC settlement and 24/7 operations by around the end of 2026 (pilot entry). ChinaAMC (HK) paid for a tokenised fund subscription with a tokenised deposit under EnsembleTX, and its fund’s underlying deposits are now tokenised with HSBC (pilot entry).

On the stablecoin side, Anchorpoint opened HKDAP to institutions, corporates and professional investors through authorised distributors on 12 August 2026, with retail access targeted for as early as the end of 2026 (pilot entry). As of 23 September 2026 Anchorpoint reported HKDAP in circulation of HK$1,006,890 against reserves of HK$2,110,045 (same entry). HSBC’s stablecoin is due in the second half of 2026.

Hong Kong’s intermediary rules favour licensed stablecoins over other tokens: the SFC and HKMA circulars of 27 May 2026 exempt them from token liquidity tests and client exposure limits, and let banks and brokers hold client stablecoins with the issuer (Wire).

Singapore has tokenised deposits in production and no licensed stablecoin yet. DBS runs DBS Token Services for institutional clients on its own permissioned Ethereum Virtual Machine (EVM) chain, and on 5 September 2026 completed a weekend US dollar payment with Citi using tokenised deposits over the Swift Digital Ledger (pilot entry). MAS’s stablecoin framework, settled in 2023, requires reserves in segregated accounts on trust and redemption at par within five business days (MAS response, para 4.3 and Annex A). The September 2026 draft law adds a ban on interest and powers over stablecoins MAS does not license (Wire). MAS’s BLOOM initiative, launched on 16 October 2025, works with industry on settlement in both tokenised bank liabilities and regulated stablecoins (MAS release).

India has no stablecoin framework, and the Reserve Bank of India argues against private stablecoins and for its own central bank digital currency (State of Play: stablecoin rules).

The case against

Against stablecoins: they break the singleness of money. The BIS argues that stablecoins fail three tests for the mainstay of a monetary system (BIS Annual Economic Report 2025, chapter III). On singleness, a stablecoin carries its issuer’s name and can trade away from par, so one Hong Kong dollar in HKDAP need not equal one in another issuer’s coin. On elasticity, the cash-in-advance constraint means supply cannot expand to meet payment needs. On integrity, stablecoins on public chains can move to unhosted wallets where users are not identified. The BIS proposes instead a unified ledger holding tokenised central bank reserves, tokenised deposits and tokenised government bonds, where banks settle with each other in central bank money.

Against tokenised deposits: they stay inside the bank. The BIS itself lists what stablecoins offer: anyone with an internet-connected device can hold them, they are programmable, and they may lower the cost of cross-border payments (same chapter). A tokenised deposit reaches only the bank’s own onboarded clients, and moving it to another bank needs an interbank link such as EnsembleTX. Issuers argue on these grounds: HSBC cites PayMe’s 3.3 million users as the channel for its stablecoin (HSBC release, 10 April 2026), a reach its corporate tokenised deposit service does not have.

A non-ledger alternative: the existing rails. Hong Kong banks already settle with each other in central bank money through RTGS, and EnsembleTX itself still settles interbank through RTGS (HKMA release, 13 November 2025). What either token adds over a bank transfer is 24/7 settlement between wallets and programmability, and HSBC’s claims for both rest on its own releases.

The BIS objection bites hardest in Hong Kong on integrity, not singleness. On singleness, a licensed issuer must redeem at par within one business day and hold reserves on a trust that survives its insolvency (HKMA guideline, paras 3.3.1 and 3.3.3), which narrows the room for a coin to drift from par. The elasticity limit is built into any fully reserved design and is the price of keeping reserves out of lending. The integrity concern, stablecoins moving to unhosted wallets where no one is identified, is the one Hong Kong’s current design answers directly: HKDAP moves only between whitelisted wallets (pilot entry), and Singapore’s draft law would require licensed issuers to be able to trace, freeze and burn tokens (Wire).

That answer holds only while the whitelist does. Anchorpoint plans retail access as early as the end of 2026, and HSBC’s stablecoin is aimed at retail from the start. If either opens to wallets no distributor has verified, the integrity objection returns in full.

For Ethereum

The two Hong Kong instruments sit on different kinds of ledger. HKDAP is an ERC-20 token on Ethereum mainnet behind an EIP-1967 upgradeable proxy, with transfers limited to whitelisted wallets and freeze and blacklist functions in the contract (pilot entry). HSBC’s tokenised deposits run on a private network whose technology HSBC has not disclosed, and DBS’s run on a private EVM chain that only DBS clients can use (pilot entry).

This follows from the legal difference. A stablecoin is a bearer claim on a reserve pool, so it can move on a public chain between holders the issuer has approved, with no bank in the path. A tokenised deposit is a bank liability that has to be recorded against a named customer of that bank, and the interbank leg runs through the central bank, so the bank keeps the ledger. The Singapore draft law would require licensed issuers to be able to trace, freeze and burn tokens on-chain (para 3.22 of the consultation paper), which the fiat-backed stablecoin contracts on Ethereum already support (Wire).

HSBC has not said which chain its stablecoin will use. If a bank that keeps its tokenised deposits on a private network issues its stablecoin on Ethereum, that would show the split holding in practice: public chains for the reserve-backed instrument, private ledgers for the deposit.

What to watch

• HSBC’s stablecoin launch, due in the second half of 2026: its chain, whether wallets are whitelisted, and whether corporates can hold it.
• 16 October 2026: comments close on Singapore’s Payment Services Act amendments, followed by the Notice on trace, freeze and burn capabilities.
• Around the end of 2026: the HKMA’s planned move of EnsembleTX interbank settlement from RTGS to tokenised central bank money.
• As early as the end of 2026: Anchorpoint’s retail launch of HKDAP, and whether the whitelist stays.
• The SFC’s Code on Unit Trusts and Mutual Funds FAQ on stablecoin and tokenised deposit holdings, which now governs those assets in authorised funds.
• Any statement from the Hong Kong Deposit Protection Board on whether tokenised deposits are protected deposits.

A transfer is final when the law governing the system that settled it says it can no longer be reversed, including by a court administering a failed participant’s insolvency. A ledger cannot confer that status on its own. What a ledger provides is a technical point after which changing the record is impractical. For tokenised settlement to be safe, the two points have to be defined and have to line up. In Hong Kong that happened in 2023 because the tokenised bond settled through a system the law already protects. In Singapore and India the tokenised trials settle in central bank money, but the documents published so far do not describe the legal basis of their finality. On a public chain, the issuer has to choose the point and write it down.

The problem

The Principles for Financial Market Infrastructures, the global standard for payment and settlement systems, require a system to define “the point at which settlement is final” and add in a footnote that final settlement “is a legally defined moment” (CPMI-IOSCO PFMI, 2012, Principle 8, key consideration 1 and footnote 86). Existing systems meet this through statutes that protect designated systems from insolvency law.

Tokenised settlement is now moving real value in all three markets. The HKMA’s EnsembleTX pilot settles tokenised deposit transfers between banks (pilot entry). MAS settled interbank overnight loans between DBS, OCBC and UOB in wholesale central bank digital currency (CBDC) in November 2025 (pilot entry). India’s Demat 2.0 settles tokenised corporate bonds against the RBI’s wholesale e-rupee through the Unified Markets Interface (pilot entry). SEBI lists “implications for clearing, settlement finality and the roles of MIIs” among the things the Demat 2.0 pilot is meant to test (SEBI FAQ, Q21).

For public chains the question has reached capital rules. MAS’s April 2026 proposal lets banks hold tokens on permissionless chains at the lower Group 1 capital treatment only if “there must be a point of finality defined for the underlying blockchain”, documented and made available to users (MAS consultation paper, Annex D para 2(b); Wire).

How it works

Some terms first. Settlement is the transfer that discharges an obligation: the buyer gets the bond, the seller gets the cash. Delivery versus payment (DvP) means the asset moves only if the payment moves. Atomic settlement means both legs happen as one transaction that either completes entirely or fails entirely. Real Time Gross Settlement (RTGS) is the central bank’s system for moving money between banks one payment at a time. A designated system is a payment or settlement system that a statute names for protection.

Two kinds of finality matter. Legal finality is the moment after which a transfer is “irrevocable and unconditional” in law (PFMI, para 3.8.1). The main threat it guards against is insolvency: statutory finality protects transfers settled through a designated system from being reversed under insolvency and winding-up law if a participant fails (HKMA, Bond Tokenisation in Hong Kong, para 36). Technical finality is the moment after which the ledger’s record cannot practically be changed.

One trade: Hong Kong’s first tokenised green bond

In February 2023 the Hong Kong government issued HK$800 million of one-year tokenised green bonds. The HKMA’s Central Moneymarkets Unit (CMU), Hong Kong’s settlement system for debt securities, cleared and settled it on Goldman Sachs’ GS DAP platform, a private blockchain (HKMA release, 16 February 2023). The HKMA’s report on the issuance, Project Evergreen, sets out each step (HKMA, Bond Tokenisation in Hong Kong, August 2023, paras 6 and 7).

1. Pricing day (T). Books were built and the bonds priced off-chain, as for any bond. The CMU, acting as “Tokenisation Registrar”, created the smart contracts that would represent the bonds on the ledger, and as “Cash Token Manager” created the contracts for Hong Kong dollar cash tokens.

2. Cash in (T+1). Each syndicate bank paid ordinary Hong Kong dollars equal to its subscription into the CMU’s account in the HKD RTGS system, which settles interbank payments one by one across the HKMA’s books (report, footnote 3). This leg is an ordinary central bank money payment.

3. Cash tokens minted. The banks asked the CMU to mint cash tokens for the amount paid. Each cash token is a claim on the HKMA for one Hong Kong dollar (para 33). The tokens were transferred to the banks’ cash token accounts on the platform.

4. Instructions and approvals. A settlement program generated two sets of instructions: bond tokens from the government to the banks, and cash tokens from the banks to the government. The government, the banks and the CMU each approved them.

5. Atomic DvP. The program executed both transfers “atomically”, so the bond and the cash moved together or not at all. Payment in cash tokens discharged the government’s obligation under the bond terms (para 33).

Where the legal moment sits. The CMU is deemed a designated clearing and settlement system under section 55 of the Payment Systems and Stored Value Facilities Ordinance (Cap. 584), and deemed to hold a certificate of finality. Transfer orders settled through it are protected from insolvency and winding-up law, so they “are irrevocable and will not be reversed by the insolvency of a participant” (para 36). The HKMA’s release adds that the on-chain records “will be the legally definitive and final records of ownership” for parties on the platform. The ledger’s record and the protected system’s record were the same record.

What made that possible. The platform was the CMU’s own. The report says that a different ledger platform would get statutory finality only if the HKMA designated it under the Ordinance, and otherwise the parties “may achieve settlement finality by agreeing it contractually” (paras 37 and 38). The report does not say how far a contractual agreement would hold against insolvency law; the statutory kind is the one it describes as protecting transfers from it.

The same trade on a public chain

On Ethereum, technical finality comes in steps. Time is divided into 12-second slots and 32-slot epochs. The first block of each epoch is a checkpoint. When validators holding two-thirds of the staked ether vote for a pair of checkpoints, the later one becomes “justified” and the earlier one “finalized” (ethereum.org: proof of stake). To reverse a finalised block, an attacker would lose at least a third of all staked ether. If the chain fails to finalise for more than four epochs, a mechanism called the inactivity leak bleeds stake away from validators voting against the majority until the rest can finalise again (same source).

Before a checkpoint is finalised, a block can still be dropped. The Basel Committee’s research group reports that such “orphaned” blocks occur at a daily frequency, and that businesses set their own conventions for how deep a transaction must be before they treat it as done (BCBS Working Paper 44, August 2024, section 2.3.2). It estimates the cost of reversing technical finality on large chains such as Ethereum in “the billions of euros” (footnote 9).

No statute in Hong Kong, Singapore or India designates Ethereum. A bond settled there has technical finality at the finalised checkpoint and legal finality only where a contract or the issuer’s rules say so. MAS’s proposed condition asks the issuer to name that point: “All transactions on the blockchain are considered final only when the blockchain specific point of finality has been met or exceeded” (Annex D para 2(b)). The Basel paper warns that even where the legal moment is defined, probabilistic settlement “may still cause misalignment between legal finality and technical settlement” (section 2.3.2).

Why it is built this way

Legal finality exists to contain one bank’s failure. PFMI says the legal basis “including the insolvency law, must acknowledge the discharge” of an obligation for it to count as final, and that “a well-reasoned legal opinion is generally necessary to establish the point at which finality takes place” (PFMI, para 3.8.4). Designation statutes give that protection only to named systems, and each names the systems rather than the technology. Singapore’s Payment and Settlement Systems (Finality and Netting) Act “was designed to be technology-neutral, allowing MAS to designate critical payment and settlement systems regardless of the technology used” (MAS speech on the 2018 amendment bill).

That explains why Hong Kong’s first tokenised bond ran inside the CMU. Settling through a system the law already covered gave the bond statutory finality from the first trade, and the HKMA presented the offering as showing that Hong Kong’s legal environment is “flexible and conducive” to such issuances (HKMA release). The cost was that the platform operated under the CMU, and only distributors the CMU approved could take part (HKMA report, para 5).

The central bank money choice follows from the same standard. PFMI asks settlement systems to settle money in central bank money “where practical and available” to avoid credit and liquidity risk (Principle 9). The tokenised settlement pilots that central banks run in these markets all do so: CMU cash tokens, EnsembleTX’s interbank leg through RTGS, MAS’s wholesale CBDC, and India’s wholesale e-rupee. That leaves one question for each: when the payment is final.

On a public chain, the moment of finality should be the one the protocol itself computes: Ethereum’s finalised checkpoint. It is defined in the protocol’s rules, documented, and would cost an attacker at least a third of all staked ether to reverse, which the Basel paper puts in the billions of euros (BCBS WP44, footnote 9). The issuer’s contract and published rules should record that point, not replace it with an operator’s book. That is what MAS’s proposal asks of issuers (Annex D para 2(b)), and it puts trust in the system’s rules rather than in a settlement agent’s ledger entry.

The gap is insolvency law. A contract that points to the checkpoint may not hold against insolvency law, and statutory designation exists to close exactly that gap. Closing it would take a finality law that recognises a protocol’s finalised state, which no statute in the three markets does yet.

In our markets

Hong Kong has the only tokenised settlement in the three markets whose legal finality is published. The 2023 bond settled through the CMU with statutory finality (HKMA report, para 36). The government’s fourth digital green bond, priced on 28 September 2026 at about HK$20 billion, offered three ways to settle its Hong Kong dollar tranche: the traditional rail, tokenised central bank money, and, for the first time, tokenised deposits through EnsembleTX (HKMA release, 29 September 2026). EnsembleTX settles banks’ tokenised deposit transfers through the HKD RTGS system for now, with a planned move to tokenised central bank money on a 24/7 basis (HKMA release, 13 November 2025). The HKMA has not said whether EnsembleTX itself is a designated system.

Singapore has a finality law that can reach any technology, and has not said how it applies to the ledger it trials. MEPS+, the Singapore dollar RTGS system, is designated under the Finality and Netting Act, which protects transfer orders, netting and settlement from being reversed on a participant’s insolvency (MAS speech, 2018). MAS’s November 2025 trial on the SGD Testnet settled real overnight loans, recorded in the banks’ “official books and regulatory filings”, with atomic settlement of multiple assets among the Testnet’s functions. The release does not mention designation or finality (MAS release, 13 November 2025). For public chains, MAS’s capital proposal makes a documented point of finality a condition for banks (Annex D para 2(b)).

India attaches finality to determination rather than payment. Section 23 of the Payment and Settlement Systems Act, 2007 makes a settlement under an approved procedure “final and irrevocable”, and its explanation places that moment when the amounts payable are determined, “whether or not” they are actually paid (Payment and Settlement Systems Act, section 23). The RBI’s wholesale e-rupee has settled government securities trades since November 2022 and now settles tokenised certificates of deposit and Demat 2.0 bonds through the Unified Markets Interface (pilot entry). SEBI’s FAQ describes Demat 2.0’s DvP as atomic, “either both legs settle or neither does” (Q9), and lists settlement finality as a matter the pilot will test (Q21). No RBI or SEBI document found for this piece says whether the Demat 2.0 ledger or UMI is an authorised system under the 2007 Act.

The case against

RTGS already gives final settlement in real time. PFMI asks for final settlement “intraday or in real time” where necessary (PFMI, Principle 8), and the HKD RTGS system, MEPS+ and India’s RTGS already provide it in central bank money. The alternative design keeps the cash leg in RTGS and puts only the asset on a ledger, linking the two so the asset moves when the RTGS payment is final. That is how EnsembleTX settles between banks today (HKMA release, 13 November 2025), and the Hong Kong government’s fourth digital bond still offered the traditional rail alongside the tokenised options. On this view, a tokenised cash leg adds a new legal question without removing an old risk.

Atomicity is not finality. SEBI’s FAQ says atomic DvP “eliminates the risk” of one party delivering without being paid (Q9). That removes principal risk inside the ledger. It does not decide whether a court would treat the completed transaction as irrevocable if a participant failed the same day. The Hong Kong report makes the same distinction: the CMU’s statutory finality, not the platform’s atomicity, protects transfers from insolvency law (para 36).

Technical finality is never absolute, on any ledger. The Basel paper notes that technical settlement finality “is also probabilistic in permissioned systems or centralised traditional systems”, citing the 2016 theft of US$81 million from Bangladesh Bank (BCBS WP44, footnote 9). Private ledgers remove validator risk but keep the risk of hacking and operator error. The legal moment is what settles disputes after either kind of failure.

The on-ledger cash leg is worth the legal work. With both legs on one ledger, the code settles them together or not at all, so neither party has to rely on the other, or on a settlement agent, to deliver after being paid (SEBI FAQ, Q9; HKMA report, Table 1). An RTGS-linked design gets a similar result, but leaves that assurance with the operators who link the two systems. What the atomic design still needs is the legal moment set out above.

What to watch

• The HKMA’s move of EnsembleTX interbank settlement to tokenised central bank money, planned for around the end of 2026, and whether it designates the system or relies on contract.
• MAS’s details on the tokenised MAS Bills trial settled in CBDC, promised for 2026, and any statement on the SGD Testnet’s status under the Finality and Netting Act.
• SEBI and RBI findings from the Demat 2.0 pilot on settlement finality and the roles of market infrastructure institutions.
• MAS’s final rules on public-chain tokens, including how it words the point-of-finality condition.

A whitelisted token splits control in two. The issuer controls the token: a list in the token’s code decides which wallets may hold it, and the issuer can freeze, reverse or destroy holdings. Nobody controls the chain: independent validators run it, and the issuer cannot choose them, audit them or stop a fork. What the issuer gets for accepting that is a ledger that distributors, custodians and other banks already connect to. Regulators in Singapore and Hong Kong now accept the design on condition that the issuer keeps the controls, and treat the chain itself as a risk to be capped and watched.

The problem

Singapore and Hong Kong institutions have put tokens on public chains while limiting who can hold them. DBS tokenises structured notes on Ethereum for accredited and institutional investors, sold through three third-party platforms (pilot entry). UBS Asset Management’s tokenised money market fund, uMINT, runs on Ethereum and is sold through authorised distributors (pilot entry). Anchorpoint, a Standard Chartered subsidiary licensed by the Hong Kong Monetary Authority (HKMA), issues its Hong Kong dollar stablecoin HKDAP on Ethereum mainnet to whitelisted wallets only (pilot entry).

The same banks also run private ledgers. DBS’s own tokenised deposits, DBS Token Services, run on a permissioned chain that DBS controls (pilot entry). J.P. Morgan offers deposit accounts on its private permissioned blockchain and, since November 2025, a deposit token for institutional clients on Base, a public network built on Ethereum (J.P. Morgan release, 12 November 2025).

The question is now a capital and custody question. Under the Basel standard as Singapore drafted it in 2025, banks would have had to put every token on a permissionless chain in Group 2, the costly capital treatment (MAS consultation paper, April 2026, para 2.2). On 17 April 2026 the Monetary Authority of Singapore (MAS) proposed that banks may use the lower Group 1 treatment for such tokens if the issuer keeps specific controls, including a holder whitelist (Wire). On 27 May 2026 the HKMA told banks to take extra caution with tokens that have no such controls (Wire).

How it works

Some terms first. A ledger is a record of who holds what. A public permissionless chain, such as Ethereum, is a ledger that anyone can read and anyone can help run by operating a validator, a computer that checks transactions and adds them to the ledger. A private permissioned ledger is run by a set of institutions that decide who may take part. A token is an entry on a ledger representing one unit of an asset. A smart contract is a program on the ledger; each token is governed by one. A wallet is an address on the ledger, controlled by a cryptographic key. A whitelist is a list of wallets the token’s contract allows to hold or receive it.

The whitelist lives in the token, not in the chain. Anyone can send a transaction on Ethereum. The token contract decides whether a transfer of that particular token succeeds.

A transfer that succeeds

Follow HKDAP, the only Singapore or Hong Kong token above with a published contract address.

1. Onboarding. A corporate client opens an account with an authorised distributor, such as the licensed trading platform OSL or Standard Chartered (pilot entry). The distributor checks the client’s identity and registers the client’s wallet. Anchorpoint says each holder’s wallet must be whitelisted by at least one authorised distributor “to enable any transaction of HKDAP” (Anchorpoint user alert).

2. The instruction. The client’s wallet sends a transaction to the HKDAP contract on Ethereum, asking it to move HKDAP to a supplier’s wallet. The supplier has been onboarded by a distributor too. Ethereum validators include the transaction in a block like any other and collect a fee, paid in ether, for doing so (ethereum.org: gas and fees).

3. The checks. The HKDAP contract is an upgradeable proxy whose current logic contract, verified on Etherscan, is named ControllableAHKD (Etherscan). Its published interface points to separate contracts for a blacklist, for frozen holdings and for activating token holders, and includes a switch that pauses all transfers. These are how Anchorpoint’s whitelist rule is enforced on-chain. Both wallets are registered and neither is blacklisted or frozen, so the contract debits the client and credits the supplier.

4. Finality. The transfer is final when the block containing it is finalised by Ethereum’s validators (ethereum.org: proof of stake). Anchorpoint’s reserves and books are unchanged. The only record of the transfer is on the public chain, visible to anyone.

A transfer that the contract blocks

Now the client sends HKDAP to a wallet no distributor has registered, perhaps an address copied wrongly, or a wallet belonging to someone who has not been checked. Ethereum still includes the transaction in a block and the sender still pays the fee (ethereum.org: gas and fees). Under Anchorpoint’s rule that a wallet must be whitelisted to enable any transaction, the token contract rejects the transfer and no HKDAP moves. The chain records a failed transaction.

If HKDAP has already reached a wallet that should not hold it, the issuer can act after the fact. The contract’s interface includes functions to freeze holdings, to destroy the balance of a blacklisted address, and to pause every transfer (Etherscan). None of these needs the cooperation of the chain’s validators: the issuer changes its own token’s records.

The standard form of the same design

HKDAP uses its own contract design. ERC-3643, a finalised Ethereum standard for tokens that represent regulated securities, specifies the same checks in a common form (ERC-3643). Before each transfer the token asks an identity registry whether the receiving wallet belongs to a verified investor who holds the required attestations from trusted issuers, then asks a compliance contract whether the transfer breaks any offering rule, such as a cap on the number of holders. It also checks that neither wallet is frozen and the token is not paused. An agent appointed by the issuer can force a transfer, freeze a wallet or part of a balance, and move tokens to a new wallet when an investor loses the key.

A third form puts the check on the venue rather than the token. In Project Guardian’s first pilot in 2022, DBS, J.P. Morgan and SBI Digital Asset Holdings traded tokenised deposits and bonds through adapted versions of the Aave and Uniswap protocols on Polygon, a public chain, where each trade was checked against a digital credential that a regulated institution had issued to the trader (pilot entry).

On a private ledger

On DBS’s permissioned chain the check happens one level down. Only parties DBS admits can reach the network at all, so the token needs no list of its own to keep out strangers. DBS says the permissioned design gives it full control over the services (pilot entry). The code can be the same: DBS’s chain runs the Ethereum Virtual Machine (EVM), the same execution environment as Ethereum (pilot entry).

Why it is built this way

The design lets the issuer keep the legal and compliance duties it cannot hand to a public network, while using that network as shared plumbing.

The issuer’s duties do not change with the ledger. An issuer of a security or a stablecoin must know its holders, meet anti-money laundering rules and be able to fix errors. The Basel Committee’s research group lists the controls a token contract can carry for this purpose: a denylist of barred addresses, an allowlist of approved addresses, and a controller that can block and reverse fraudulent transactions and amend the token’s code. It notes that the controller governs “the specific tokens of a specific issuance”, not the network (BCBS Working Paper 44, August 2024, section 3.2).

The regulators have written those controls into their rules. MAS’s deeming provisions, which give a bank a safe route to Group 1, include issuer functions to correct or freeze transactions under governance controls and with the legal right to do so, and permissioning so that “only whitelisted entities or whitelisted wallets that have been pre-screened and verified can hold and perform transactions” (MAS consultation paper, April 2026, Annex D paras 2(a) and 3(a)). The HKMA’s custody guidance says that permissioned tokens with access controls in the smart contract “may enable recovery of lost assets”, unlike permissionless tokens on a public chain (HKMA guidance, 27 May 2026, para 9). Hong Kong’s Securities and Futures Commission (SFC) lets tokenised funds use public permissionless networks only with “additional and proper controls”, with a permissioned token as the example (Wire).

What the public chain adds is reach. The institutions’ own statements put it in terms of connections to other firms. DBS sells its Ethereum notes through ADDX, DigiFT and HydraX to investors who need not be DBS clients (pilot entry). UBS reported its first on-chain subscription and redemption for uMINT through DigiFT as distributor (pilot entry). J.P. Morgan says its clients want “faster and easier money movement on public blockchains” (J.P. Morgan release).

Of these, distribution carries the most weight. A public chain is the one ledger that distributors, custodians and platforms can all connect to without joining a bank’s own network. That is why DBS keeps its tokenised deposits on its private chain but puts notes it wants other platforms to sell on Ethereum. None of these institutions has published volumes, so whether the reach produces buyers is not yet shown.

There is also a positioning reason. MAS’s interim caps on exposure and issuance, set out below, keep the business small by design. A small issue on a public chain buys a bank operating experience and standing with its regulator while the capital rules are being written, at a cost the caps limit. No institution gives this as its reason; it is an inference from the caps and from how small the published activity remains.

In our markets

Singapore has moved first on capital. MAS’s April 2026 proposal disapplies the Basel conditions on validators that a permissionless chain cannot meet, provided the bank meets principle-based requirements on governance, technology, settlement finality and anti-money laundering (para 2.4 and Annex C). The deeming provisions add conditions on the chain as well as the token: a large or unconcentrated validator set, documented governance, a defined point of finality, independent audits of smart contracts, and a business continuity plan with an off-chain “golden source” of records (Annex D paras 1 and 2). During the interim period a locally incorporated bank’s Group 1 exposure to such tokens is capped at 2% of Tier 1 capital and its issuance at 5% (para 2.8); for foreign bank branches the caps are 0.2% and 1% of branch assets (para 2.9). MAS lists “Trust Anchors” as an example of a permissioning control (Annex D, footnote 8), the credential model tested in Project Guardian.

Hong Kong has moved on custody and product rules rather than capital. The HKMA’s guidance lets banks scale custody controls to the network type (private permissioned, public permissioned, public permissionless) and asks for extra caution before relaxing controls, or outsourcing custody, for permissionless tokens on public permissionless networks (HKMA guidance, paras 9, 11 and 14). The SFC’s tokenisation circular requires added controls for funds on public chains (Wire). HKDAP is the one Hong Kong case with a published contract. ChinaAMC (HK) calls the chain for its tokenised money market fund a “public permissioned blockchain” without naming it; third-party trackers list the Hong Kong dollar class as an Ethereum token, but ChinaAMC has published no address (pilot entry).

The HKMA calls a token “permissioned” when its contract has access controls; MAS asks whether the token has whitelisting. Both describe the same design: an open chain and a closed token.

The case against

The whitelist does nothing about the chain. The Basel Committee’s research group lists risks a bank takes on a permissionless chain that sit below the token (BCBS Working Paper 44, section 2):

• Governance: upgrades are decided by participants the bank cannot hold accountable, often off-chain, and a disagreement can split the chain in two, leaving two tokens for one underlying asset (section 2.1).
• Attacks: a party controlling a majority of validation could choose which transactions are recorded (section 2.2).
• Fees: validators collect transaction fees and may be illicit parties operating under pseudonyms (section 2.3.1).
• Finality: on many permissionless chains settlement is probabilistic, and legal finality and technical finality may not line up (section 2.3.2).
• Liquidity: every transfer is visible, which can speed a run, and fees can rise and blocks fill up exactly when holders most need to move (section 2.4.1).

The paper’s main mitigant for chain failure is the issuer’s business continuity plan, such as an off-chain register that identifies the rightful owner after a fork or attack. It says the efficacy of such plans “remains an open question” and that moving an asset off a failed chain “could prove complex and expensive” (section 3.1). It concludes that current mitigants “have not been tested under stress” (executive summary). Singapore’s caps and Hong Kong’s “extra caution” are the regulators’ answer to that gap.

A whitelisted token keeps little of what makes the chain open. A critic would ask what is left of a public chain once the token restricts every holder, the issuer can reverse any transfer and trading happens on a licensed platform’s order book rather than on-chain, as the SFC’s rules for tokenised funds provide (Wire). On that view the institution takes on the chain’s operational risks and gets a shared database. A private ledger such as DBS’s, running the same EVM code, gives the same programmability without the public exposure. The Bank for International Settlements proposes a different shared ledger altogether: a unified ledger run under public-sector governance, holding tokenised central bank money, deposits and bonds together (BIS Annual Economic Report 2025, chapter III).

The non-ledger alternative is the existing register. A fund or note can keep its register with a transfer agent or depository and sell through the same platforms by conventional connections. DBS has not said whether the token or a separate register is the legal record of its notes, and UBS has not said so for uMINT (pilot entries). Where the register lives elsewhere, the chain carries a copy.

The answer depends on the asset. For cash-like tokens, such as a stablecoin or a deposit token, the trade is worth making. They gain from being usable at any whitelisted counterparty on any platform, and on Ethereum the chain-level risks listed above have been small in practice: the BCBS paper notes that no proof-of-stake chain had suffered a majority attack when it was written (section 2.2), and the issuer’s freeze and correction functions cover errors in the token itself (MAS Annex D para 2(a)). For a note sold through a few platforms and held to maturity, the case is weaker. The reach adds little once the note is placed, and the chain-level risks stay for its whole life.

Both judgements rest on the issuer’s off-chain fallback working if Ethereum has a serious incident, and, as above, no one has yet tested one under stress.

For Ethereum

This is the route regulators in Singapore and Hong Kong have opened for regulated assets on Ethereum: an ERC-20 compatible token with an allowlist, a freeze and correction function held by the issuer, and an off-chain register as backup. ERC-3643 is the finalised standard for it; HKDAP uses a custom contract with the same kinds of controls. Respondents to MAS’s 2025 consultation called the Group 2 default “not technology neutral and punitive”, citing safeguards built on layer 2 networks (para 1.2), and J.P. Morgan chose Base, a layer 2 network, for its deposit token.

Ether itself cannot use this route. It has no issuer to freeze, correct or whitelist, so it stays in Group 2 under the MAS proposal (Wire). What moves into Group 1 is bank-issued tokens that use Ethereum as settlement infrastructure. Each whitelisted transfer still pays fees to Ethereum’s validators, so the chain earns from these tokens. The tokens cannot flow into open DeFi protocols unless every counterparty wallet and pool contract is on the list, because an address not on the allowlist can neither send nor receive the token (BCBS WP44, section 3.2).

What to watch

• MAS’s response to feedback on the April 2026 consultation, and whether the 2% and 5% caps survive in the final rules.
• A Singapore bank notifying MAS and using the Group 1 route for a token it issues on a public chain.
• Published contract addresses for DBS’s structured notes, uMINT or ChinaAMC’s fund, which would show whether each uses ERC-3643, a custom whitelist, or no on-chain control.
• The first tokenised fund listed for secondary trading on a Hong Kong platform under the April 2026 circulars, and whether its tokens move on-chain between platforms.
• Any Basel Committee revision of the Group 2 default for permissionless chains.

Demat 2.0 does not create a new kind of bond. The Securities and Exchange Board of India (SEBI) says the tokenised bond keeps its ISIN, rating, covenants and investor rights, and that the depository remains the legal record of who owns it (FAQ, Q2 and Q16). What changes is where the cash moves and when. The money leg moves out of the banking system’s settlement channels and into the Reserve Bank of India’s (RBI) wholesale central bank digital currency (CBDC), and it settles in the same instant as the bond.

The problem

India dematerialised its securities under the Depositories Act, 1996. Since then, a bond has been an entry in a depository’s database, not a paper certificate. So the question for an Indian issuer, investor or regulator is narrower than it is in markets where tokenisation replaces paper: what does a second generation of electronic record add?

SEBI’s answer, in its press release of 10 September 2026, is about time and manual work. Issuers get their money on the day of bidding instead of two to three days later. Investors who sell in the secondary market get paid immediately instead of in two to three days. Coupons and redemptions pay out automatically on the due date. SEBI also says settlement risk is eliminated.

The pilot launched with three issues worth ₹1,025 crore in total: REC (₹500 crore, 18 investors, 7 September 2026), L&T (₹500 crore, 4 investors, 9 September) and IIFL (₹25 crore, 1 investor, 9 September). The pilot entry tracks it against SEBI’s stated stages.

How it works

Four terms first. A distributed ledger is a record of holdings that several institutions keep identical copies of, updating them together. A token is an entry on that ledger that represents one unit of an asset and can move between accounts under rules written into the ledger. A smart contract is a program on the ledger that carries out those rules, such as paying a coupon on a date. Delivery versus payment (DvP) means the security moves only if the payment moves.

Follow one issue, as SEBI describes it.

1. Bidding. The issuer runs its placement on a stock exchange’s Electronic Bidding Platform, as it does today. Bidding, allotment rules and timelines do not change. The depository issues the ISIN in the usual way and flags it as a tokenised pilot ISIN (FAQ, Q4).

2. Accounts. Each investor needs two things. The first is a “Demat 2.0 account”, which is an extension of the investor’s existing demat account, not a new one, and uses the existing KYC. The second is a wholesale CBDC wallet opened with the investor’s own bank under the RBI’s e₹ pilot. The depositories hold the private keys, the cryptographic credentials that authorise transfers, on the investor’s behalf (Q6 to Q8). The issuer needs only a CBDC wallet linked to its bank account (Q5).

3. Allotment and settlement. On allotment, the depository credits the bond tokens to the allottees’ Demat 2.0 accounts and the issue proceeds reach the issuer’s CBDC wallet (Q4). The ledger, run by the depositories and stock exchanges with technology support from NPCI, connects to the RBI’s wholesale CBDC through the RBI’s Unified Markets Interface (UMI). The bond leg and the CBDC leg are linked so that either both settle or neither does (Q9, Q20). SEBI says the issuer receives funds on the day of bidding.

4. Servicing. The bond’s coupon rate, payment dates, day-count convention and redemption terms are written into a smart contract (Q3). On each due date the contract reads the holders recorded on the ledger at the record date and pays e₹ to their CBDC wallets (Q12). Today, according to SEBI, the issuer or its registrar has to obtain the list of holders from the depositories, compute what each is owed, and send each payment through the banking channel (press release).

5. Selling. Secondary trading is for Stage II. Until then an investor can exit through a depository-to-depository transfer on request, with the payment made outside the atomic settlement, in CBDC or through banks (Q19). When Stage II arrives, trades will still be struck on the exchanges’ existing request-for-quote (RFQ) and OTC reporting platforms. Only settlement moves to the ledger (Q11).

Why it is built this way

The design keeps every institution that already runs India’s bond market in its current role. The exchanges still run issuance and trading. The depositories still hold the legal record and now also own the ledger. SEBI’s FAQ describes the pilot as technology-neutral and says the regulatory framework for the bond is unchanged (Q13), and SEBI’s release frames this as the point: the bonds “trade in the same manner as bonds held in demat form, so the market is not fragmented”.

SEBI contrasts this with tokenisation elsewhere, which it says “has largely been undertaken by individual issuers on separate platforms”, naming Project Helvetia III, Hong Kong’s Project Evergreen, US Treasury bonds and issues by BlackRock, J.P. Morgan and AIIB. It claims India is the first country to issue corporate bonds natively on a ledger with the statutory depositories holding the ownership record and the cash leg in CBDC (press release).

The choice of central bank money for the cash leg follows from the aim of atomic settlement. For the bond and the payment to move as one transaction, the ledger has to be able to move the money as well as the bond. The RBI’s wholesale CBDC, which banks have used since November 2022 to settle trades in government securities (pilot entry), is the settlement asset the RBI controls and can connect through UMI.

Each institution keeps or extends its role. The depositories and exchanges keep issuance, trading and the ownership record. The RBI plans more tokenisation pilots with more participants in 2026-27 (annual report 2025-26). Issuers and investors are asked to invest in no new technology (Q18).

SEBI’s stated reason is the one above: a single bond market rather than a separate platform for each issuer. The design has a further advantage. Because the ledger sits inside the depositories, which remain the legal record, the Depositories Act, 1996 stays untouched (FAQ, Q16), and the regulatory sandbox only has to relax rules for a limited scope and period (Q23).

In our markets

India, Hong Kong and Singapore have made different choices about where tokenised bonds live.

In India, both the tokenised certificates of deposit on UMI (pilot entry) and Demat 2.0 sit inside market infrastructure run or overseen by the RBI and SEBI. The ledger is private and permissioned (Q20), and SEBI has not named the ledger software.

In Hong Kong, the government issued a HK$800 million tokenised green bond in 2023, settled through the HKMA’s Central Moneymarkets Unit on a private platform, and moved later issues to another private platform (pilot entry). The SFC now permits retail secondary trading of tokenised authorised funds on licensed platforms (Wire).

In Singapore, DBS has tokenised structured notes on Ethereum mainnet for accredited and institutional investors (pilot entry), and MAS has proposed lower capital treatment for bank holdings of tokens on permissionless chains that meet requirements on governance, technology, settlement finality and AML (Wire).

On the ledger, India’s regulators kept tokenised bonds inside the existing depositories, Hong Kong’s government issues have used private platforms, and Singapore is making room for public chains with controls.

The case against

Three objections come from the research on securities settlement.

Speed may not need a new ledger. A BIS Quarterly Review article from March 2020 by Bech, Hancock, Rice and Wadsworth argues that the length of settlement cycles reflects back-office processes, legal arrangements and liquidity management rather than technology. On that view, the two-to-three-day wait for issuers could be shortened within the existing clearing corporations and RTGS. The evidence that would settle this is a comparison of Demat 2.0 against an accelerated conventional cycle, which the pilot does not run.

Atomic settlement costs liquidity. The same article notes that tokenised settlement tends toward trade-by-trade gross settlement, because netting is harder on a decentralised ledger, and that settling trades individually generally requires more liquidity. A buyer in Demat 2.0 has to hold e₹ in a wallet before the trade, rather than paying a net amount at the end of a cycle. The authors add that if each tokenised ledger has its own cash token, the need to hold cash on several ledgers can raise liquidity needs across the system. Stage I covers primary issuance, where each investor pays once. Stage II, with secondary trading and retail investors, is where the liquidity cost would show.

The ledger duplicates the depository. SEBI says the depository remains the authoritative record and the ledger is “the form in which the record is maintained” for the pilot (Q16). The depositories hold investors’ keys (Q7), and freezes and attachments on a demat account apply to the tokenised holding (Q17). The ledger is controlled by the same institutions that run the database it would replace. A critic would ask what the ledger does that a depository database connected to CBDC could not. SEBI’s answer is that the shared ledger lets all authorised institutions see bondholder details at once and removes reconciliation between them (press release). Whether that saving is large enough will show in the cost data, which SEBI has not published.

Retail access raises a separate question. Wholesale CBDC is used by banks and institutions to settle with each other, and the retail e₹ is a separate RBI pilot for individuals and merchants (pilot entry). SEBI’s release says Demat 2.0 investors need a wholesale CBDC wallet with a participating bank (press release), yet Stage II is meant to extend access to retail participants (FAQ, Q22). How that gap closes depends on how the pilot progresses.

On an aggressive path, a bank or broker would hold wholesale CBDC and settle on behalf of its retail clients, so retail investors reach the ledger through an intermediary rather than a wallet of their own. No SEBI or RBI document describes this arrangement yet.

On a conservative path, the retail stage is simply not designed yet. SEBI gives no date for Stage II, and the three Stage I issues went to 18, 4 and 1 investors (press release). The SEBI circular or sandbox approval for Stage II, naming the settlement asset for retail investors, will show which path the pilot is on.

For Ethereum

Demat 2.0 runs on a private, permissioned ledger owned by India’s depositories, and public chains play no part. For issuers or investors hoping to reach Indian corporate bonds through public-chain wallets, nothing in the SEBI or RBI documents points that way.

The pilot’s own plan stays within regulated institutions. The ledger is private and permissioned, its first nodes are run by the depositories and stock exchanges, and Stage III considers extending nodes only to regulated entities such as credit rating agencies and depository participants (FAQ, Q20 and Q22). A node is an institution that runs a copy of the ledger and takes part in updating it.

If a permissionless chain were ever involved, Singapore shows the form it would take. MAS has proposed that banks may give tokens on permissionless blockchains the lower capital treatment when they meet requirements on governance, technology, settlement finality and anti-money laundering, with a safe harbour for designs where the issuer can freeze or correct transactions and whitelist holders (Wire). The chain is public, but the token carries the issuer’s controls, so only approved holders can own it and the issuer can reverse an error. That is the model under which a regulated bond can sit on a public chain, and it is not the one India has chosen for Demat 2.0.

What to watch

• The start of Stage II: secondary trades settled atomically on the existing RFQ platforms, and the admission of retail investors. SEBI has given no date.
• Any SEBI or RBI data on settlement times, issuance costs and investor numbers from Stage I, which would test the claimed savings.
• The pilot’s exit from the regulatory sandbox, which SEBI says will come before a broader framework is considered (Q23).
• New instruments and node operators in Stage III.

In the week of 21 September 2026 Ethereum’s core developers confirmed that the Glamsterdam upgrade will activate on the Sepolia testnet on 6 October, the first fixed date on its path to mainnet. The upgrade reprices contract storage, which puts a testing task on every institution in the covered markets with a live contract on Ethereum mainnet. In Hong Kong, ChinaAMC moved its digital money market fund’s underlying deposits onto HSBC’s tokenised deposit service, and the HKMA’s chief executive described CMU OmniClear’s planned platform for on-chain bond settlement.

Glamsterdam’s gas repricing and the issuers on Ethereum mainnet

At the All Core Devs testing call on 21 September (ACDT #97), developers confirmed Sepolia activation for 6 October at epoch 353024, 13:53:36 UTC, with client releases due on 29 September. Hoodi, the next testnet, is tentatively set for 27 October, with a go or no-go decision on 8 October. No mainnet date is set. The date had moved: the agenda for the 3 September call had proposed Sepolia on 28 September (ACDC #186). The upgrade’s contents are listed in its meta EIP.

For institutions, the changes that matter are the gas repricings. EIP-8037 raises the cost of creating state: new accounts, new storage slots and deployed code. EIP-8038 raises the cost of reading and writing existing state. The Ethereum Foundation’s guidance for contract developers says contracts with hardcoded gas assumptions may break: fixed stipends such as Solidity’s 2,300-gas transfer and send, hardcoded gas values in calls, and logic that branches on remaining gas. It asks maintainers to check their code and wallet and infrastructure providers to update gas estimation, and says ordinary users need do nothing.

Three pilots on this site run on Ethereum mainnet:

• HKDAP, Anchorpoint’s licensed Hong Kong dollar stablecoin, an ERC-20 behind an upgradeable proxy with a wallet whitelist and freeze functions.
• UBS Asset Management’s tokenised fund in a Singapore Variable Capital Company, under Project Guardian.
• DBS’s tokenised structured notes, distributed to accredited and institutional investors.

A fourth, ChinaAMC’s digital money market fund, sits on a chain ChinaAMC calls “public permissioned”; third-party trackers list it on Ethereum, which ChinaAMC has not confirmed.

Permissioned tokens do more work per transfer than a plain ERC-20. Before moving tokens, the contract checks that both wallets are on the whitelist and that neither is frozen, and each check reads contract state. Under EIP-8038 those reads cost more. Whether the increase is material for any of these contracts is not public; it depends on how each contract stores its lists. What is clear is that each issuer, or its tokenisation agent, has a Sepolia and Hoodi test cycle to run before mainnet, and that an upgradeable proxy like HKDAP’s lets an issuer fix a contract without reissuing the token.

Glamsterdam also adds EIP-7708, under which plain ETH transfers emit a log, the same kind of record token transfers already produce. Monitoring tools that read token transfer logs can then see ETH movements the same way.

I think Glamsterdam strengthens the case for Ethereum mainnet. The repricing makes some operations dearer, including the whitelist and freeze checks permissioned tokens run on every transfer, but per-transfer fees are small beside an issuer’s operating costs. Capacity matters more. Block-level access lists (EIP-7928) and a proposed 200 million gas limit, on the agenda for the 24 September execution-layer call, are meant to raise throughput, which weakens the argument for moving low-volume institutional instruments to a layer-2 network. The mainnet gas limit is not yet decided, and throughput has not been what held these pilots back, so this is a judgement about direction. Gas measurements for a whitelisted token contract on Sepolia after 6 October, and any issuer statement about Glamsterdam, will test it.

Regulation

On 23 September HKMA chief executive Eddie Yue told the Treasury Markets Summit that CMU OmniClear is building a digital asset platform for “24-hour, on-chain atomic settlement”. He said it will support settlement against CBDCs and explore integration with tokenised deposits and regulated stablecoins. He also said half the world’s digital bonds by volume were issued in Hong Kong in the first half of 2026, and repeated the plan to test tokenised Exchange Fund Bills. The speech fills in the CMU OmniClear commitment in the Policy Address (para 35): a settlement platform run by the HKMA’s central securities depository, on a ledger the HKMA has not named, that could accept stablecoins as well as central bank and commercial bank money.

Pilots

On 21 September ChinaAMC (HK) said that the HKD and USD deposits underlying its digital money market fund are now tokenised using HSBC’s tokenised deposit capability, with Standard Chartered providing custody and digital asset infrastructure. ChinaAMC says the deposits can move in real time and outside operating hours while remaining conventional bank deposits “in all legal and prudential respects”, and calls it the first such arrangement in Asia-Pacific. The fund’s units and its cash are now both tokenised, but on different ledgers: HSBC’s network for the deposits, and the fund’s own chain for the units. Investor subscriptions are still paid in fiat.

On the site

• Pilot Scorecard: ChinaAMC Digital Money Market Fund records the tokenised deposit integration as an expansion.

What to watch

• Glamsterdam client releases on 29 September, Sepolia on 6 October, and the Hoodi go or no-go on 8 October.
• MAS’s stablecoin consultation closes on 16 October 2026 (Wire).
• CMU OmniClear’s platform, due this year, and CBDC settlement on EnsembleTX around year-end (Policy Address, paras 35 and 50).

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In the week of 14 September 2026 HKDAP, the Hong Kong dollar stablecoin that runs on Ethereum mainnet, settled its first announced business payments. On 16 September the Chief Executive’s Policy Address committed the government to letting regulated stablecoins trade on licensed platforms and settle tokenised money market funds, and set year-end dates for tokenised Exchange Fund Bills and round-the-clock CBDC settlement.

HKDAP moves from test transfers to invoices

On 14 September Payment Asia, OSL and Anchorpoint announced two business payment flows in HKDAP. Payment Asia paid the logistics firm ShipAny for delivering point-of-sale terminals, and paid for staff hotel, day-stay and workspace bookings through the booking agency Flow. The release describes the full cycle: fiat funding, minting, the business payment, same-day reconciliation, redemption and burn. Anchorpoint issued and redeemed the tokens, and OSL handled distribution and settlement. No amounts were disclosed.

HKDAP is issued by Anchorpoint Financial, a Standard Chartered-led joint venture with HKT and Animoca Brands, under one of the HKMA’s first two stablecoin issuer licences. It is an ERC-20 token on Ethereum mainnet, and every holder’s wallet must be whitelisted by an authorised distributor before it can transact (pilot entry, Anchorpoint user alert). Beta Access, open since 12 August, is limited to institutions, corporates and professional investors.

These are the first payments for goods and services that any HKDAP participant has announced. Earlier activity was test transfers, and minting and redemption through distributors. The payments ran on Ethereum mainnet, between whitelisted wallets, with a licensed issuer and a licensed platform at either end. That is the design Anchorpoint chose under Hong Kong’s rules: a public chain with a closed holder list. It shows a licensed stablecoin can complete an ordinary business payment on Ethereum. It does not yet show that businesses outside a partner’s own supply chain will hold one.

Regulation

The Chief Executive’s 2026 Policy Address, delivered on 16 September, sets out two tracks for tokenised money in Hong Kong.

The first track is regulated stablecoins, which in practice today means HKDAP on Ethereum. The government will “promote the trading of regulated stablecoins on licensed virtual-asset trading platforms and their use in the settlement of tokenised money market funds” (para 49). The SFC already lets licensed platforms list licensed stablecoins without prior approval (Wire item). Settlement of tokenised funds in stablecoins would be new: Hong Kong’s retail tokenised money market fund, ChinaAMC’s, takes subscriptions in fiat.

The second track is HKMA-run infrastructure. The HKMA plans CBDC settlement and 24/7 operation under EnsembleTX “by around the end of this year” and more uses for tokenised deposits (para 50), including trade-finance pilots with the Mainland by year-end (para 99). It will test tokenised Exchange Fund Bills, the HKMA’s own short-term paper, by year-end, so banks can use more than HK$1.3 trillion of them round the clock (para 35). CMU OmniClear will set up a digital asset platform this year for issuing and settling digital bonds (para 35), and government digital bond issuance becomes regular, with settlement in digital currencies (para 35).

The Policy Address also commits to tokenised gold and other real-world assets on licensed platforms (para 49), and to the SFC starting its digital-asset custody surveillance system in the second half of 2026 (para 50).

I expect both tracks to run, split by investor. Retail investors and users of licensed crypto platforms will settle in licensed stablecoins, which the Policy Address ties to tokenised money market funds (para 49) and which the SFC already lets those platforms list. Institutions will settle in tokenised deposits and, from around year-end, CBDC on EnsembleTX, the HKMA’s pilot for settling tokenised assets (para 50). A subscription to ChinaAMC’s tokenised fund was already paid there with a tokenised deposit in November 2025 (pilot entry). The Policy Address does not say the tracks divide this way; this is my reading of paragraphs 49 and 50 side by side. The first tokenised fund subscription paid in a licensed stablecoin, and CBDC settlement going live on EnsembleTX, will show whether the split holds.

Pilots

• HKDAP: first announced business payments, 14 September.
• HKSAR Government tokenised green bonds: the Policy Address makes digital bond issuance regular, with settlement in digital currencies (para 35).

What to watch

• CMU OmniClear’s digital asset platform, due this year, and tokenised Exchange Fund Bill tests by year-end.
• CBDC settlement and 24/7 operation on EnsembleTX, around year-end.
• HKDAP retail access, which Anchorpoint targets for as early as end-2026 (pilot entry).
• MAS’s stablecoin consultation closes on 16 October 2026 (Wire).

In the week of 7 September 2026 Singapore’s three largest banks completed their first live Singapore dollar payments over Swift’s blockchain-based ledger, days after DBS and Citi used it for a weekend US dollar payment. In Mumbai, SEBI and the Reserve Bank of India (RBI) launched Demat 2.0, which puts corporate bonds on a ledger run by India’s depositories and settles them in wholesale central bank digital currency (CBDC). India’s Financial Intelligence Unit also named 15 offshore crypto platforms, including token swap services, for operating without registration.

Swift’s ledger goes live in Singapore

On 7 September DBS said that it and Citi’s New York office had completed a US dollar payment between Singapore and the United States on Saturday 5 September, using tokenised deposits over Swift’s ledger. DBS says the payment took minutes, against an industry norm of up to two business days. On 10 September DBS, OCBC and UOB said they had completed the first live domestic interbank transactions in Singapore dollars using tokenised deposits on the same ledger.

Both releases describe the same mechanism. Each bank records the payment as a tokenised deposit on its own ledger. Swift’s ledger acts as an “orchestration layer”: it matches the banks’ obligations to each other and nets them. Final settlement then runs through existing systems. The tokens never leave the banks’ own books, and the interbank settlement still happens in the conventional way, later.

Swift said in July that the ledger was ready for initial use, with 17 banks preparing live pilots, among them DBS, OCBC, UOB, HSBC, Standard Chartered and MUFG. UOB and HSBC had already run Hong Kong dollar transactions on it in August.

The Ethereum connection is in how the ledger was built. When Swift announced the ledger in September 2025, it said Consensys, an Ethereum software company, would build the conceptual prototype, and that the ledger would “record, sequence and validate transactions and enforce rules through smart contracts”. The same release said Swift would orchestrate between “both private and public networks”. Swift’s releases do not name the chain the ledger runs on, and access is limited to participating banks.

This matters for Ethereum in two ways. The banks are using Ethereum-derived technology, smart contracts and a shared ordered ledger, for money that stays inside the regulated perimeter. And nothing in these transactions touches a public chain: no token is issued on Ethereum, and no public-chain asset settles against the deposits.

I read Swift’s ledger as a bridge. Swift built it on smart contracts, from a prototype by an Ethereum software company, and said at launch that it would orchestrate between private and public networks (Swift, September 2025). That makes it the shortest route for tokenised deposits in Singapore to settle, later, against tokenised assets on public chains, without each bank connecting to those chains itself. No such transaction has been announced and the ledger is not public, so this is a reading of the design, not of anything Swift has done yet. The test is whether Swift names the ledger’s chain, or runs a first transaction that settles against an asset on a public network.

Regulation

India, tokenised bonds. SEBI and the RBI launched Demat 2.0 on 10 September at the Global Fintech Fest. Corporate bonds are issued as tokens on a distributed ledger owned by the depositories, and the cash leg settles in wholesale CBDC through the RBI’s Unified Markets Interface, so bond and cash move at the same moment. REC, L&T and IIFL issued tokenised bonds worth Rs 1,025 crore between 7 and 9 September. Later phases add secondary trading on request-for-quote platforms and retail access. The Wire item has the detail.

Demat 2.0 and Swift’s ledger make the same choice from opposite directions. India kept the bond inside its statutory depositories and changed the settlement money. Singapore’s banks kept their deposits on their own books and added a shared layer between them. Neither uses a public chain.

India, crypto registration. On 9 September the Financial Intelligence Unit (FIU-IND) issued notices under section 13 of the Prevention of Money Laundering Act to 15 crypto service providers operating in India without registering, and sought takedown of their apps and websites. The list names exchanges and also instant swap services such as ChangeNow, SimpleSwap and FixedFloat. A service that swaps one token for another now clearly needs to register with FIU-IND to serve Indian users (Wire item).

Pilots

• Demat 2.0 joins the Pilot Scorecard, with three issuers in its first week.
• DBS Token Services records the DBS and Citi weekend payment as an expansion.

Technology

On 7 September the Ethereum Foundation’s protocol team set its priorities: Ethereum’s base layer should be quantum-resistant across execution, consensus and data by December 2029, with research on fast finality, privacy, state management and zkEVMs organised around that goal. The same day it published its view of the candidate changes for Hegota, the upgrade after Glamsterdam. Neither post mentions institutional use. For a bank or fund that issues a long-dated instrument on Ethereum mainnet, the 2029 target sets the horizon on which the chain’s signature schemes are expected to change.

On the site

• Regulatory Wire: FIU-IND issues non-compliance notices to 15 offshore crypto platforms (9 September).
• Regulatory Wire: SEBI and RBI launch Demat 2.0 (10 September).
• Pilot Scorecard: SEBI Demat 2.0 tokenised corporate bonds, new.

What to watch

• UOB said it would run Singapore dollar and US dollar transactions on Swift’s ledger with other banks in September (UOB).
• The second phase of Demat 2.0, with secondary trading.
• Whether any of the 15 platforms register with FIU-IND.
• MAS’s stablecoin consultation closes on 16 October 2026 (Wire).

In the week of 31 August 2026 the Monetary Authority of Singapore (MAS) published draft amendments to the Payment Services Act that would turn its 2023 stablecoin policy into law. The draft requires licensed issuers to be able to trace, freeze and burn their tokens on-chain, and leaves open whether Singapore will go further and restrict the wallets that may hold them. Ethereum core developers, meanwhile, were settling the testnet schedule for the Glamsterdam upgrade.

Stablecoins on Ethereum under Singapore law

On 1 September 2026 MAS opened a consultation on amendments to the Payment Services Act 2019. The consultation paper adds a “stablecoin issuance” licence class, and only licensees could call their tokens “MAS-regulated stablecoins” (para 2.6). Every other stablecoin would stay a digital payment token. Comments close on 16 October 2026. The Regulatory Wire item sets out the full proposal.

Two provisions decide how a MAS-regulated stablecoin would work on a public chain such as Ethereum.

The first is a duty to hold the technical ability to trace, freeze or burn stablecoins used for illicit activity, with the details to follow in a separate MAS Notice (para 3.22). In a token contract, that means an issuer-controlled function that can stop a given address from moving tokens and can destroy tokens held there. The major fiat-backed stablecoin contracts on Ethereum already have freeze or blacklist functions, so for most issuers this writes existing practice into law.

The second is paragraph 3.23. MAS lists measures other jurisdictions have considered, including verified identity for every holder and restrictions on unhosted wallets, and says it will assess whether Singapore needs more than trace, freeze and burn. It makes no proposal yet.

Hong Kong shows what the stricter version looks like. HKDAP, the Hong Kong dollar stablecoin that Anchorpoint Financial issues under one of the first two HKMA licences, runs on Ethereum mainnet, but every holder’s wallet must first be whitelisted by an authorised distributor, according to Anchorpoint’s user alert. The chain is public and the holder list is closed. A MAS-regulated stablecoin under paragraph 3.22 alone would be a public token that the issuer can freeze. Under the measures in paragraph 3.23 it would look more like HKDAP.

The draft also reaches stablecoins that Singapore does not license. MAS could require information from any issuer whose token claims a stable value, designate a stablecoin as systemic wherever it is issued (paras 4.1 to 4.3), and then direct licensed crypto service providers to stop offering or delist it (para 4.9). The power works through the exchanges MAS supervises rather than through the token contracts, which MAS cannot reach when the issuer is offshore.

Singapore should stop at trace, freeze and burn. Freezing acts on an address after the fact; a whitelist decides in advance which addresses may hold the token at all. The MAS label is voluntary, and a stablecoin without it remains a legal digital payment token (para 2.6). If the label comes with wallet restrictions, issuers can do without it, and the stablecoins people in Singapore hold will be the ones MAS does not license. Trace, freeze and burn gives MAS a tool against illicit funds without closing the token to self-custody and to DeFi. No issuer has said it would stay out of Singapore over wallet rules, so this rests on how a voluntary label works rather than on anyone’s stated plans. MAS’s response to the consultation, and its Notice on trace and freeze capabilities, will show which way it leans.

Technology

Ethereum’s next network upgrade, Glamsterdam, is moving to public testnets. The agenda for the 3 September consensus-layer developers’ call (ACDC #186) put a Sepolia testnet fork on 28 September, at epoch 351232, up for confirmation. The upgrade raises the gas cost of creating and reading contract state, and the Ethereum Foundation has asked contract maintainers to check code that relies on fixed gas amounts before it reaches mainnet. That applies to every stablecoin and tokenised-asset contract that institutions in the covered markets run on Ethereum mainnet.

On the site

• Regulatory Wire: MAS consults on Payment Services Act amendments to put its stablecoin framework into law (1 September).

What to watch

• The Global Fintech Fest in Mumbai, 8 to 11 September.
• Confirmation of the Glamsterdam Sepolia fork date.
• MAS’s comment deadline, 16 October 2026.