Hong Kong Eyes Tokenized Gold Trading to Counter Dollar Dominance

Authorities weigh move to establish world’s first digital gold settlement hub amid rising geopolitical strains.

Policy Push Toward Tokenized Gold

Authored by GoldFix ZH Edit

Authorities in Hong Kong are considering a major initiative to expand tokenized gold trading, a step aimed at positioning the city as the world’s first settlement centre for digital gold transactions while reducing reliance on the US dollar.

According to the South China Morning Post, Chief Executive John Lee Ka-chiu is expected to outline the effort in his upcoming policy address. His advisers have urged him to put forward a framework for tokenized gold trading that would strengthen Hong Kong’s standing as an international financial hub. One insider noted, “The move will boost gold trading in Asia and bypass the Western-dominated international payment settlement system amid the rising geopolitics.”

Strategic Hedge Against Sanctions

The push comes as global tensions highlight the vulnerability of Western-led payment systems. The exclusion of several Russian banks from SWIFT during the war in Ukraine served as a warning. Advocates argue that digital gold settlement could provide Hong Kong with greater resilience. Another source explained, “Digital gold trading would help Hong Kong stave off Western sanctions such as a SWIFT ban.”

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Supporters say the initiative would enhance liquidity and lower investment barriers. But shortcomings remain: digital gold offered by local banks does not guarantee redemption in physical metal, while major institutions such as HSBC continue to store trading reserves in London rather than in Asia.

GoldFix Comment

By encouraging citizens to trade gold in tokenized form, Hong Kong seeks to build a liquidity pool that allows digital gold to reach critical mass for everyday users, while simultaneously putting in place institutional frameworks for large-scale trading.

This mirrors the strategy being advanced by BRICS nations: a top-down and bottom-up rollout of gold as money. At the sovereign level, governments set rules, accumulate reserves, and choose to settle trade outside of dollars or treasuries. At the popular level, they liberalise ownership, enable small transactions, and promote tokenisation for seamless use. Taken together, these efforts create the conditions for gold to replace the dollar in transactions across BRICS economies.

They are replacing the dollar as a currency with tokenized gold.

The renewed focus reflects surging investor demand. Gold prices have risen more than 40 percent over the past year, according to the World Gold Council. Analysts believe a stronger gold ecosystem could help Hong Kong reclaim its position as a leading precious metals hub, particularly as competition from Singapore intensifies.

Building Infrastructure and Competition

Lee has previously called gold market expansion a “game-changer” for Hong Kong’s financial sector. Last year, his administration pledged to promote gold storage and delivery infrastructure, with new facilities at the Airport Authority expanding vault capacity from 150 tonnes to 1,000 tonnes. Private firms in the region are also building capacity, including a massive Singapore vault unveiled by Silver Bullion that can hold 10,000 tonnes of silver and 500 tonnes of gold.

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The renewed focus reflects surging investor demand. Gold prices have risen more than 40 percent over the past year, according to the World Gold Council. Analysts believe a stronger gold ecosystem could help Hong Kong reclaim its position as a leading precious metals hub, particularly as competition from Singapore intensifies.

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