EXCLUSIVE: “Tokens of Esteem” – Lewis Lei Sun, HSBC in ‘The Fintech Magazine’

How do banks maintain their reputation for reliability and trust in the fast-moving world of fully digital currencies where confidence could so easily die on the alter of speed? It’s something HSBC’s Lewis Lei Sun has thought a lot about. Banks and governments across the world are adapting to an ever-advancing tide of financial technology, including the increasing adoption of digital currencies. Global behemoth HSBC is no exception.

It was the first foreign bank in China to offer services around the country’s central bank digital currency, the e-CNY, making it available to all its retail and corporate customers in China. Hong Kong clients can now top up their personal e-CNY wallets directly through the HSBC HK mobile banking app, although currently they can only spend the tokens on transactions in China.

But that’s just one example of how the bank is embracing tokenisation.

Here, Lewis Lei Sun, HSBC’s Global Head of Digital Currencies, Corporate and Institutional Banking, outlines the bank’s strategy for ensuring that it not only delivers experiences for, but also retains the trust of, its 42 million customers as it takes tokenisation, in all its many forms, mainstream.

THE FINTECH MAGAZINE: How fast is HSBC developing services around tokenisation?

LEWIS LEI SUN: We participate in many of the central bank digital currency (CBDC) initiatives in our home markets. But in terms of adoption, it depends on how quickly central banks want to drive this forward. It’s not completely within our control how we apply this concept to real-world use cases. We also have tokenised deposit services – essentially the tokenised form of commercial bank money.

That is completely in our gift. If you’re able to adopt tokenisation technologies and overlay additional benefits to existing bank deposits, adding additional value and benefits to our clients, why wouldn’t you want to do that? So we have! We went live with our tokenised deposit services in Hong Kong, Singapore, Luxembourg, the UK, and the US, last year, and in the later part of 2026 we’ll also go live in the United Arab Emirates.

The benefit of tokenised deposit services is essentially to help customers move money instantly within the HSBC network on a 24/7 basis. It also allows them to put conditions on payments. We call it programmable money. We have already implemented live use cases for treasury funding movements using digital money to settle digital assets.

We’re also looking at regulated stablecoins. In quite a few jurisdictions, the new stablecoin ordinance has been published, so we can look at potentially supporting some of the additional use cases there.We don’t consider any of this digital money as being superior to another. We believe all of them will co-exist and that they will actually serve different purposes. But we cannot force all the clients to use only one bank, so supporting cross-bank interoperability of digital currencies is very important.

In Hong Kong, we’re working with the Hong Kong Monetary Authority to see how we can bring all the digital currency and digital asset players together on the same interoperable infrastructure to support cross-bank, cross-institutional use cases.

In the UK, we participate in the initiative called GBTD (Great British Tokenised Deposits), which is working on a number of tangible use cases, supporting cross-bank clearing and settlements. And, at a global level, we are looking with Swift at a ledger initiative to upgrade its current infrastructure to support the settlement and clearing of digital money

We really want to support multi- chain strategies connecting our tokenised deposit services and digital money to a more public infrastructure.

“We don’t consider any of this digital money as being superior to another. We believe all of them will co-exist and that they will actually serve different purposes”

Lewis Lei Sun

TFM: Instant speed is one of the attractions of tokenisation. It must be frustrating for you when that hits a wall of national interest where independent digital ledgers don’t necessarily interact. What advice do you have for clients?

LSS: It’s highly unlikely the whole globe can align to a single global network or global ledger, for various reasons, including national interest. Driven by governments and by regulators, different networks or ledgers might be established to sustain the fundamental infrastructure. That’s normal. Even when we look at a traditional banking world there are many different clearance systems that co-exist.

I think clients first need to have their design principles driven by the regulatory standards, the technical capabilities, and also the commercial interest – the business case behind the development of digital payments.

The second thing I’d tell them is to get ready. It may not be a one-size- fits-all solution. They’ll be dealing with certain levels of fragmentation, and so they must get interoperability ready, support multi-networks, support multi-chain, and the multi-ledger that will probably be inevitable down the road.

TFM: Banking safety has traditionally institutional use cases. relied on slowness to catch errors.Do instant payments increase the velocity of systemic risk?

LSS: Instant payments can increase the velocity at which risk crystallises, mainly because traditional ‘slowness’ often came from compliance and operational requirements (screening, investigations, exception handling and cut-offs), not just technical constraints. When those processes are compressed into real time, there’s less opportunity to pause and intervene before funds move, so errors, fraud, or control failures can scale faster.

That said, instant rails don’t have to increase systemic risk if firms replace time-based buffers with controls-by-design: real-time risk scoring, dynamic limits, circuit breakers, and strong operational resilience. The core shift is from relying on elapsed time to relying on engineered, automated controls and on fast incident response.

TFM: How does HSBC bridge the gap between high-speed digital ledgers and the last mile of the global economy that remains reliant on slower legacy payments?

LSS: If you look at cross-border payments and certain correspondent banking situations, there are delays today in redeeming money. Speed is certainly one aspect we want to offer to our clients, but security, safety, and maybe programmability are the others. There are already certain payment alternatives available on the market, like stablecoins, which are being used day in and day out by consumers and some smaller enterprises. But if we want to overlay the same service for institutional clients, just giving them a wallet is often not enough.

What about payment transparency, compliance standards, audit trail? That’s why we’re conducting the innovation in such a manner that it ensures traceability, certainty, and transparency, which are so critical for institutional use cases.

TFM: What can be done to maintain trust and security in the system when using these new types of money?

LSS: Trust is extremely important for a bank. It’s the core value we offer to clients who entrust their deposits to us. In the digital currency space, two things are needed to maintain this. One is ensuring there are infrastructure controls in place to accommodate the potential demand from a risk governance perspective for digital currencies. As a bank, we also need to be extremely vigilant in governing the risk aspect of the new solutions.

A bank takes on blockchain risk, governance risk, also immediate settlement. As transaction speeds increase, be they stablecoins, tokenised money market funds, tokenised deposits, or similar instruments, issues can emerge and escalate quicker than in traditional payment flows. So, how do you build confidence in the safety of this system? If the design is not end-to-end, not holistic, any potential hiccup might lead to an amplified risk for the whole workflow. Controls and governance need to evolve to accommodate this new type of settlement mode.

A thorough review of the controls for every single checkpoint, the handshaking between different systems, those design principles need to be embedded into the risk and governance philosophy.

TFM: Five years from now, what would give you confidence that public faith in banks and financial institutions had been maintained?

LSS: Client experience will be the best indicator. It’s not so easy to define good client experience, but there are a few aspects that we want to really look into before we can claim this as a success. The first is the volume we process. Is that sizable enough to add value to the customer base we’re servicing?

The second is our end-to-end risk and compliance controls. Are we still able to provide a service completely compliant with the prevailing regulatory requirements? That, in my view, especially for institutional use cases, is something we don’t want to compromise.

Thirdly, have we truly embedded technologies into our day-to-day workflow and is the design robust? Do the resilience, security, and safety continue to be guaranteed when we offer anything to our clients? Combine all of this, and you probably have a good client experience. Then we can claim this as a mainstream instrument that will sustain for a long time.

This article was published in The Fintech Magazine Issue #38, Page 33-34