Abu Dhabi Securities Exchange taps HSBC for digital fixed income securities project

Rick Steves

Abu Dhabi Securities Exchange (ADX) and HSBC are jointly pioneering the development of digital fixed-income securities, a first-of-its-kind regional collaboration aiming to introduce a wider spectrum of capital market use cases in the Middle East, leveraging blockchain and smart contract technology.

Abu Dhabi Securities Exchange (ADX) and HSBC Bank Middle East Limited (HSBC) have initiated a groundbreaking collaborative effort to develop digital fixed-income securities, marking the first regional collaboration of its kind.

This initiative aims to pave the way for a broader array of capital market use cases in the Middle East. The endeavor taps into the investment product expertise of ADX, recognized as the fastest-growing Middle Eastern exchange, alongside HSBC’s world-class investment banking, capital markets, and blockchain capabilities.

Digital bonds via HSBC Orion and listed on ADX

Abdulla Salem Alnuaimi, the Chief Executive Officer of ADX, expressed his optimism about this collaboration, saying, “We are delighted to collaborate with HSBC, one of the world’s leading banks, in developing a digital fixed income product.” This project underscores ADX’s ongoing digital transformation journey, aiming to continue offering innovative products to its burgeoning investor base. The objective extends to exploring a framework that facilitates digital assets, such as digital bonds, to be accessible on HSBC Orion, HSBC’s digital assets platform, and to be listed on ADX.

Mohamed Al Marzouqi, the Chief Executive Officer, UAE, HSBC, emphasized HSBC’s stride towards digitization by adopting emerging technologies like blockchain. He remarked, “…This capability will help accelerate efficiency and drive new and innovative opportunities for investors.” The collaboration between HSBC and ADX aims to leverage HSBC Orion and their combined expertise in capital markets and custody, proposing an exciting development to the market.

Digital bonds signify financial instruments that are engineered and managed utilizing blockchain and smart contract technology, aiming to drive efficiencies in capital markets. Through blockchain technology, a myriad of assets including equity, fixed income, real estate, and private equity can be tokenized. This transformation is poised to democratize asset ownership, enabling a broader spectrum of investors to partake in the securities markets, thus enhancing market accessibility.

The intersection of blockchain technology with smart contract functionalities promises to revolutionize the conventional frameworks of capital market operations. It could potentially streamline processes, enhance transparency, and mitigate the operational risks associated with traditional securities transactions. This collaborative initiative between ADX and HSBC is not only an innovative step toward digital fixed-income securities but also a significant stride toward fostering a more inclusive and efficient capital market ecosystem in the Middle East.

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