Hang Seng Investment Management has launched a new physically backed gold exchange-traded fund (ETF) on the Hong Kong Stock Exchange, introducing a significant bridge between traditional finance and blockchain technology. The Hang Seng Gold ETF, trading under stock code 3170 (03170), began trading on January 29, 2026, and saw an impressive 9% rise in its early trading hours.
The ETF is designed to track the LBMA Gold Price AM benchmark and holds physical gold bars meeting London Bullion Market Association (LBMA) good delivery standards. The gold is stored in vaults in Hong Kong, with HSBC acting as the custodian. The fund is structured as a passive ETF with an estimated ongoing charge of 0.40% per year and does not intend to make dividend distributions, meaning returns depend entirely on gold price movements.
A key innovation is the plan for tokenized, unlisted units of the same fund. According to the prospectus, HSBC has been appointed as the tokenization agent and will issue digital tokens representing ownership of fund units on a blockchain. "Initially, the Tokenisation Agent intends to utilise Ethereum as the primary blockchain," the document states, noting that other secure public blockchains may be adopted in the future.
These tokenized units will represent ownership interests recorded on blockchain infrastructure, with each token corresponding to a unit or a fraction of a unit. Subscription and redemption transactions will be recorded on a public blockchain. However, these units are not yet available, pending regulatory approvals, and will only be accessible through approved distributors with no secondary market trading.
This launch aligns with broader trends in financial tokenization. Last week, the New York Stock Exchange and its parent Intercontinental Exchange announced development of a blockchain-based platform for trading tokenized stocks and ETFs. A recent Sygnum report predicted that tokenization is expected to go mainstream in 2026, with up to 10% of new bond issuance by major institutions potentially being tokenized at launch.
The move also supports Hong Kong's positioning as a crypto hub, following recent pilots by the Hong Kong Monetary Authority on tokenized deposits and digital assets. The launch represents a significant step in blending the stability of a traditional safe-haven asset like gold with the transparency and efficiency of blockchain technology.
