What To Know:
- Hang Seng Investments plans to launch a gold ETF in Hong Kong with both traditional exchange-listed units and a separate tokenized class issued on Ethereum.
- The ETF is fully backed by physical gold stored in Hong Kong under HSBC custody, with tokenized units available only through approved distributors.
- The move comes as tokenized gold trading surged in 2025, reaching $178 billion in volume and drawing growing interest from institutional investors.
Hang Seng Investment Management is planning to introduce tokenized fund units with the launch of its latest gold exchange-traded fund.
The Hang Seng Gold ETF, listed under the ticker 03170.HK,will be launched on the Hong Kong Stock Exchange on January 29. The fund tracks the LBMA Morning Gold Price and holds physical gold as its underlying asset.
Hang Seng Gold ETF To Be Tokenized
According to local media reports, each unit of the ETF had a net asset value of HK$16 as of January 23, with 50 units forming one trading lot. The management fee is set at 0.25% annually, while the total recurring expense ratio stands at 0.4%. The tracking deviation is reported at negative 0.5%.
Unlike synthetic or derivative-based products, the ETF is backed by physical gold bars stored entirely in Hong Kong. The custodian is a wholly owned subsidiary of HSBC Holdings. Vaulting and logistics services are jointly managed by Hong Kong International Airport Precious Metals Storage Limited and Brink’s Hong Kong Limited.
Alongside the exchange-listed fund, Hang Seng Investments plans to introduce a separate class of tokenized fund units that will not be listed on public exchanges.
HSBC will serve as the tokenization agent for the product. Ethereum has been selected as the initial blockchain network, though the issuer noted that other public blockchains with comparable security and distributed ledger standards may be considered in the future.
The tokenized units will function differently from exchange-traded shares. Investors will be able to subscribe to or redeem the digital fund units only through approved distributors. The tokens will not trade on secondary markets and will not be accessible through decentralized exchanges.
The structure places the product squarely within existing regulatory frameworks while still allowing fund ownership records to exist on-chain.
The launch comes at a moment of renewed global interest in gold exposure.
Over the past year, gold prices climbed nearly 70%, marking one of the metal’s strongest annual performances in decades. Demand has risen as investors react to geopolitical uncertainty, ongoing tariff strains, and concerns around sovereign debt sustainability.
Tokenized gold products were by far one of the fastest-expanding segments in crypto during the course of 2025. Gold-backed tokens like Tether Gold and Paxos Gold had a surge in flows as investors flocked to assets which are physically tied to commodities but could be transferred on blockchain rails. Market data compiled by CEX.io in 2025 said combined tokenized gold trading volume amounted to $178 billion. More than $126 billion of that activity occurred in the final quarter alone.
The figure exceeded the annual trading volume of most traditional gold ETFs and placed tokenized gold behind only one global product in terms of turnover.
If measured alongside ETFs, tokenized gold would already rank as the second-largest gold investment vehicle by trading volume worldwide.
The combined value of tokenized gold assets expanded by 177 percent during the year, climbing from $1.6 billion to more than $4.4 billion. That growth accounted for roughly one-quarter of the total expansion seen across the real-world asset sector in 2025.
Even though it is still small compared with the estimated $32 trillion global gold market, the pace of adoption has drawn increasing attention from banks, asset managers, and regulators.
Tether Gold accounted for approximately 75% of fourth-quarter trading volume following a reserve attestation that strengthened market confidence. Together with Paxos Gold and Kinesis Gold, the top three assets now represent nearly the entire sector’s capitalization.
Moreover, Matrixdock Gold recorded a sharp increase in market value after integrating with the Plume ecosystem.
Rather than creating a freely traded on-chain gold token, Hang Seng is embedding blockchain settlement into a regulated ETF structure. Ownership is tokenized, but access would be through licensed distributors.
Also Read: Ethereum Whales Keep Buying as ETH Price Slides
