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HSBC Issues First Digitally Native Structured Product in Hong Kong

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HSBC Issues First Digitally Native Structured Product in Hong Kong

The bank placed USD-denominated notes issued directly on a blockchain, with Marketnode acting as tokenization agent and digital paying agent.

HSBC has completed what it describes as its first issuance of a digitally native structured product, a private placement of USD-denominated notes in Hong Kong, the bank said in a July 10 release.

The notes were issued directly on a blockchain rather than digitized after issuance. Marketnode, an Asia-Pacific digital market infrastructure operator backed by Euroclear, HSBC, SGX Group and Temasek, acted as the tokenization agent and as the digital paying agent managing payment flows between issuer and investor.

HSBC did not disclose the size of the issuance, the reference asset, the tenor of the notes, the number or identity of investors, or the blockchain used.

What Was Issued

The transaction was a private placement of structured notes, a class of products whose returns are linked to the performance of an underlying asset. HSBC framed the deal as a pilot intended to show how tokenization can affect issuance, settlement and ongoing servicing across a product’s lifecycle.

“Building on HSBC’s work in digital assets and innovation, this issuance demonstrates how we’re working with market participants to develop practical, scalable solutions for institutional-grade digital finance,” said Suvir Loomba, Regional Head of Securities Services, Asia, at HSBC and a Marketnode board member. “Tokenisation can help make markets more efficient and accessible by streamlining key steps across product lifecycles — from issuance and settlement, through to ongoing administration and servicing.”

Patrick Boumalham, Head of Institutional Sales, Asia, at HSBC, said structured products are “an important part of investment solutions for institutional and wealth clients across Asia, where demand continues to grow,” and pointed to “clear potential for tokenisation to improve the efficiency of issuance, settlement and servicing.”

Building on Earlier Work

The issuance extends a multi-year push by HSBC into tokenized and digitally native instruments, much of it centered on Hong Kong. The bank operates HSBC Orion, a tokenization platform used for digitally native bond issuance, and has launched a retail gold token in Hong Kong.

HSBC’s collaboration with Marketnode on structured notes also predates this deal. The two firms, together with UOB, contributed a case study on digitally native issuance of structured notes as part of the Monetary Authority of Singapore’s Project Guardian.

Rehan Ahmed, CEO of Marketnode, said the deal “marks a meaningful step towards enabling investors to manage more of their portfolios on-chain, pairing broader access with efficiency gains.”

HSBC positioned the transaction as a pilot but did not say whether it plans repeat or commercial issuance, or on what timeline. It also did not detail the regulatory framework for the deal, whether settlement occurred on a delivery-versus-payment basis, whether the cash leg was tokenized, or whether the token constitutes the legal record of ownership. The Defiant has contacted HSBC for further detail.

Ethereum Foundation says AI found bug that could take validators offline

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Ethereum Foundation says AI found bug that could take validators offline

This was quickly fixed and disclosed as ‘CVE-2026-34219′ with credit to the team. The broader concern, however, was separating the agents’ real bugs from the ones that were confidently masquerading as such.

“The surprise was how little of the work went into finding them, and how much went into telling the real bugs from the ones that just looked real,” wrote Nikos Baxevanis, who authored the post.

The difficulty started with what an agent produces. A fuzzer, the standard tool that hurls malformed data at software until something breaks, returned a crash and a record of where it happened, which an engineer can confirm in minutes.

An agent, however, returns a created narrative. It traces how the flaw could be reached, argues why it matters, proposes a severity rating and supplies working code that demonstrates the attack. All of it arrives in fluent prose, reading the same whether the bug is real or invented.

Three kinds of false positive kept recurring, according to the Foundation.

The first was a crash that only occurs in a test build, where the compiler switches on safety checks that the shipped software does not carry, so nothing breaks for real users.

The second was an attack that only works if the dangerous value is planted inside the program by hand, because every route an outsider could take to deliver it rejects the value first. The third came from formal verification, the practice of proving mathematically that code behaves correctly, where a proof passed by demonstrating something trivially true and told the reviewers nothing about the software.

Crypto IPO pipeline slows amid weak market conditions

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Crypto IPO pipeline slows amid weak market conditions

Despite these headwinds Lopez says regulatory clarity is no longer the primary obstacle for companies considering public listings.

“That’s less relevant than before. Companies went public before there was regulatory clarity,” he said. “For companies like Bullish, Circle or BitGo, it’s more about access to capital than regulation.”

Kraken’s reported plans to pursue a public listing illustrate how crypto firms are adapting, Lopez says. The exchange has sought to diversify beyond crypto trading, a strategy he believes better positions companies for public markets.

“The right thing to do is become more diversified rather than being just a crypto trading business,” he says.

Institutional adoption

Despite near-term weakness in crypto funding markets, Lopez says blockchain technology continues to gain traction across traditional finance. Major financial institutions, including Morgan Stanley (MS), Nasdaq (NDAQ) and the New York Stock Exchange (NYSE), are building blockchain-based infrastructure and preparing for tokenized settlement.

The industry is moving toward near-instant settlement, shifting from T+1 to T+0, while initiatives such as the OpenUSD network are bringing together more than 140 financial institutions and payments companies around stablecoin infrastructure, he says.

Lopez expects the long-term winners to be blockchain infrastructure providers rather than businesses built solely around individual cryptocurrencies.

“A lot of crypto companies trying to raise capital in the private markets are finding it difficult because of their singular focus on one product offering,” he says.

Bonzo Lend’s total value locked plunges 77% as $9 million oracle exploit rattles Hedera

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Bonzo Lend’s total value locked plunges 77% as $9 million oracle exploit rattles Hedera

Bonzo Lend, a decentralized lending protocol on the Hedera network, suffered an estimated $9.05 million loss after an attacker exploited a verification flaw in a third-party Supra oracle contract, allowing them to borrow assets far exceeding the value of their collateral.

The attacker deposited 250 SAUCE tokens with little value, before submitting a manipulated price update that inflated the token’s HBAR-denominated value, according to a preliminary incident report from Bonzo.

The protocol said the account subsequently borrowed 6.63 million USDC and 34.52 million wrapped HBAR. At the report’s reference HBAR price of $0.06998, the two withdrawals were worth approximately $9.05 million.

A second wallet, the report adds, borrowed roughly $1 million of additional assets while the abnormal price remained active. The wallet later contacted Bonzo through Discord, identified itself as a white-hat responder to the incident and said it intended to return the funds.

Bonzo excluded those assets from its headline loss estimate, placing total principal borrowed during the incident at approximately $10.06 million before recovery.

Hedera, according to DeFLlama data, now has $25.7 million in total value locked (TVL). The figure dropped nearly 40% in the last 24 hours after the exploit. With Bonzo’s TVL

Circle Wins Final OCC Approval for National Trust Bank

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Circle Wins Final OCC Approval for National Trust Bank

The stablecoin issuer received a charter for First National Digital Currency Bank, allowing it to custody digital assets and, eventually, hold USDC reserves under direct federal supervision. Shares rose more than 10%.

Circle Internet Group (NYSE: CRCL) said on July 10 that it received final approval from the U.S. Office of the Comptroller of the Currency to establish a national trust bank, a step that brings the infrastructure behind USDC under direct federal banking supervision.

The new entity, chartered as First National Digital Currency Bank, N.A. and operating under the name Circle National Trust, will provide custody services for digital assets. According to the business plan approved by the OCC, the bank is also designed to eventually manage the reserves backing USDC, the second-largest stablecoin by market capitalization.

“OCC approval to establish Circle National Trust marks a defining step in bringing blockchain technology and digital assets into the core of the U.S. financial system,” Circle Co-Founder, Chairman and CEO Jeremy Allaire said in a statement. “Federal oversight of our trust bank sets a new standard for transparency, governance, and scale for Circle’s infrastructure.”

The trust bank charter arrives as more traditional financial institutions integrate USDC. BNY, the world’s largest custodian bank, recently added USDC to its institutional digital asset custody platform.

In his post, Allaire framed the approval as part of building “a new fundamental money layer for the internet” spanning use cases from AI agents transacting with one another to wholesale transfers between large financial institutions. “We are thrilled to be the first of a new cohort of firms establishing this kind of banking infrastructure,” he wrote.

What the Charter Allows

Upon opening, Circle National Trust will offer fiduciary digital asset custody services for Circle and its affiliates, according to the press release. The OCC-approved business plan states that, “depending on demand, FNDCB may eventually offer its digital asset custody service to a limited number of institutional customers directly, focusing on banks and other financial institutions, such as regulated derivatives organizations.”

The charter is also structured to enable future management of the USDC reserve. Circle described reserve management as a “planned” future capability rather than a service available at launch. The cash and short-term U.S. Treasuries backing USDC are currently held with third-party banking partners; the charter would allow Circle to bring those reserves under its own federally regulated custody over time.

The approval places Circle National Trust under direct oversight by the OCC, the primary regulator for national banks and national trust banks.

A Multi-Year Regulatory Path

Circle submitted its application to the OCC on June 30, 2025, and received conditional approval in December 2025, according to the company. The Defiant reported on the initial filing when Circle applied for the trust bank license last year.

The charter follows the passage of the GENIUS Act, the federal stablecoin law that establishes a framework for payment stablecoin issuers. The OCC issued a notice of proposed rulemaking to implement the statute in February 2026, and the law’s requirements take effect on Jan. 18, 2027. In his post on X, Allaire wrote that as the GENIUS Act “approaches full implementation in early 2027,” Circle is positioned “to bring critical components of USDC’s operation and reserves into this structure.”

Circle is not the only crypto firm pursuing a national trust charter. The OCC has issued conditional approvals to Ripple, Coinbase, Paxos, BitGo, Fidelity and Crypto.com, among others. The GENIUS Act has yet to take full effect, and The Defiant has reported that some firms have described themselves as “regulated” or “compliant” under a law that is not yet operative.

Market Reaction

CRCL shares climbed in early trading on July 10 following the announcement, according to market data for the stock on the New York Stock Exchange.

USDC had a circulating supply of roughly $73 billion as of July 9, according to CoinGecko, ranking it the fifth-largest cryptocurrency by market capitalization and the second-largest stablecoin behind Tether’s USDT. The token traded at $0.9999, in line with its dollar peg.

Circle has built out its regulated footprint over the past decade. It received a BitLicense from the New York Department of Financial Services in 2015, became the first global stablecoin issuer to comply with the European Union’s Markets in Crypto-Assets framework in 2024, and secured a license from Abu Dhabi Global Market’s Financial Services Regulatory Authority in 2025. The company also holds licenses in the U.K., Singapore and Bermuda.

MiCA Approval Is Not the Finish Line for Crypto Custodians

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MiCA Approval Is Not the Finish Line for Crypto Custodians

Getting licensed under the European Union’s Markets in Crypto-Assets Regulation (MiCA) framework is only the beginning for crypto custodians, as regulators turn their attention from authorization to operational resilience.

The European Securities and Markets Authority (ESMA) on Wednesday launched a Common Supervisory Action (CSA) to examine the operational resilience of crypto asset service providers (CASPs), placing custody services at the center of the review.

“The signal is quite clear: for custodians, a licence is the start line, not the finish,” Sebastien Dessimoz, co-founder and managing partner at digital asset infrastructure firm Taurus, told Cointelegraph.

The review comes shortly after MiCA’s transitional period expired, marking one of the first major supervisory exercises under the EU’s new crypto framework.

From claiming security to proving it

The ESMA told Cointelegraph that the CSA will apply to a sample of authorized CASPs under MiCA. The review will assess the maturity of CASPs’ digital operational resilience frameworks for custody activities, focusing on risks including key and storage management, transaction controls, incident response and dependencies on third-party providers.

According to industry executives, the action marks a significant shift in Europe’s crypto market, where custody providers are increasingly expected to demonstrate, not simply claim, that their operational controls can withstand real-world risks.

“The shift I expect is from asserting security to evidencing it,” Dessimoz said. “This is a healthy development,” he noted, adding that digital assets are moving deeper into regulated financial infrastructure, and that requires the same security, accountability and resilience institutions expect in traditional markets.

Related: StanChart features in ESMA’s first MiCA register update since deadline

Jody Mettler, chief operating officer of BitGo and president of BitGo Trust, told Cointelegraph that institutional clients have already been asking more detailed questions about how custody providers segregate assets, manage access controls, respond to incidents and maintain business continuity during periods of market stress.

“The signal is that regulators are looking more closely at the operational standards behind digital asset services, not just whether firms are licensed,” she added.

Markus Levin, co-founder of blockchain infrastructure company XYO, said obtaining a MiCA authorization and demonstrating operational resilience are “two different tests,” adding that CASPs able to prove robust controls before regulators complete their review could gain an advantage as institutional adoption grows.

MiCA meets DORA and the debate over centralized crypto supervision

Yuriy Brisov, a lawyer at Digital & Analogue Partners, said the review sits under two EU regulatory frameworks at once: the MiCA framework, which establishes custody obligations, and the Digital Operational Resilience Act (DORA), which sets technology risk requirements for financial firms.

“Custody technology is concentrated in a handful of vendors, so one weak supplier can hit many firms at once,” the lawyer said, adding: “Proving resilience across that supply chain, under MiCA and DORA simultaneously, is the real challenge for CASPs.”

Source: Digital Operational Resilience Act

According to Brisov, the review could set a benchmark for how regulators assess MiCA-authorized custodians and influence discussions around a more centralized approach to crypto supervision in the EU.

“The findings will feed into two live debates: the review of MiCA and the proposal to move supervision of all CASPs from national regulators to ESMA,” he said.

Magazine: The biggest blockchain upgrades still to come in 2026

Bitcoin treasury company Empery Digital sold about half of BTC stack

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Bitcoin treasury company Empery Digital sold about half of BTC stack

Empery Digital (EMPD) on Friday announced the sale of 1,400 bitcoin for $62,200 each, generating $87.1 million in proceeds.

Earlier in July, the company said it would need $65 million to close its 25% ownership in a group acquiring a Midwest facility to be converted into an AI data center.

Empery was among the hastily formed SPAC deals during the 2025 digital asset treasury company frenzy. The results for the group haven’t been pretty, with most seeing share prices collapse by 90% or more from the 2025 highs.

In what could be part of the bottoming process for bitcoin and crypto, a growing group of these companies has become sellers of the digital assets they acquired in 2025.

Empery continues to hold 1,514 bitcoin but said it has no plans to accumulate more and may sell additional BTC to fund other opportunities.

“Going forward, we plan to continue to allocate capital to similar hyperscaler-anchored opportunities,” said co-CEO Ryan Lane.

Oracle Exploit Drains $9M From Bonzo Lend on Hedera

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Oracle Exploit Drains $9M From Bonzo Lend on Hedera

Hedera-based lending protocol Bonzo Lend lost about $9 million after an attacker manipulated the price of SAUCE used as collateral, allowing the account to borrow assets far beyond the value deposited.

In a preliminary incident report published Saturday, Bonzo said the attacker deposited 250 SAUCE, worth only a few dollars, before submitting a price update that inflated the token’s value by roughly 12 orders of magnitude. The wallet then borrowed 6.63 million USDC and 34.5 million wrapped HBAR from the lending pool.

The case illustrates how oracle failures can turn low-value collateral into a tool for draining large amounts of liquidity from lending protocols, even when the application and underlying network continue operating as designed. 

Bonzo attributed the incident to a flaw in Supra’s on-chain oracle verifier, which accepted a manipulated SAUCE price carrying a zeroed signature. The protocol said Supra acknowledged the issue and deployed a fix, while stressing that the incident was not a vulnerability in Bonzo Lend’s contracts or Hedera’s core network.

Estimated economic impact of the incident. Source: Bonzo Finance

DeFi hacks continue to pressure the sector 

The incident adds to a growing number of exploits targeting decentralized finance (DeFi) protocols in 2026. 

The second quarter had become the most-hacked quarter on record by incident count, with 83 exploits and about $755 million stolen. Cross-chain bridge exploits accounted for $351 million, while compromised administrator attacks and fake token price manipulation represented 37% of quarterly losses. 

In 2026, DeFi’s total value locked (TVL) had fallen 39% to over $70 billion in June from about $115 billion in January. CryptoRank recorded 121 hacks and roughly $942 million in losses over the period, saying repeated security incidents likely weighed on user confidence and reinforced capital outflows.

Related: ‘All DeFi unsafe’ claim sparks AI security debate after April hack surge

The Bonzo incident also follows a similar collateral-pricing exploit on Stellar. In February, attackers drained roughly $10 million from a YieldBlox DAO-managed lending pool after manipulating the price path used to value USTRY collateral, allowing them to borrow assets beyond the token’s real worth. 

Magazine: Will the crypto lobby’s $189M campaign get CLARITY over the line?

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

The UK has finally shown it’s serious about crypto

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The UK has finally shown it’s serious about crypto

Then-Prime Minister Rishi Sunak announced the UK’s ambitions to be a “global cryptoasset hub” all the way back in 2022. Since then, that goal has seemed more like a distant aspiration rather than actuality. But several recent announcements suggest the gap between fantasy and reality might finally be narrowing.

Within days of each other, the Financial Conduct Authority (FCA) and Bank of England have taken major regulatory steps toward proving that the UK is serious about that goal, setting out rules designed to create a workable climate for both consumer and institutional crypto adoption.

The FCA finalized their crypto rules last month, offering guidance for crypto firms’ capital requirements, admissions and disclosures, and the wider conduct framework. Separately, the Bank of England has scrapped the previously proposed limits imposed on holdings of fiat-pegged stablecoins, as well as lowering the reserve requirement issuers must hold at the central bank from 40% to 30%.

Together, they are the clearest signal yet that the UK intends to build a leading crypto regime rather than simply talking about it.

Chet Shah is the CEO of Wirex Limited, a FCA-regulated fintech firm based in London.

A reputation earned the hard way

It’s no secret that the UK’s crypto industry has lagged behind on the global stage for the past few years. The Bank of England’s earlier stablecoin proposals, set out in November 2025, faced strong industry backlash for being too restrictive to support growth. Those plans included restricting individuals to holding no more than £20,000 of systemic sterling stablecoins, while businesses were capped at £10 million. Many argued that this was too conservative to allow stablecoins to be utilized at scale, and would fundamentally hold back the UK’s competitiveness.

New Hampshire Council Votes Down $100M Bitcoin Bonds

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New Hampshire Council Votes Down $100M Bitcoin Bonds

Policymakers in New Hampshire’s executive council voted against a proposal that would have allowed the state to issue $100 million in bonds backed by Bitcoin (BTC).

At a Wednesday hearing, the five-member panel voted 3-2 against the New Hampshire Business Finance Authority’s (BFA) proposed issuance of $100 million in BTC-backed bonds. The proposed investments, which the authority approved in November 2025, already had support from Governor Kelly Ayotte.

“It was an extremely short-sighted decision,” said state representative Keith Ammon in a Thursday X post after the vote. “I can’t believe I witnessed it in person. They should gather all relevant facts and information and reconsider their vote at a future meeting.”

Councilors Karen Liot Hill, Dave Wheeler and Janet Stevens voted against the measure, while Joseph Kenney and John Stephen approved it. The crypto investment vehicles, issued by the BFA and with CleanSpark putting up BTC as collateral, would have marked New Hampshire’s continued approval of digital asset policies, following its May 2025 crypto reserve law.

Related: Bank of Korea governor outlines tokenized bond vision, unified ledger plan

While the BTC-backed bonds had support from many in the crypto industry, some experts warned against the proposal, saying it carried “substantial risk” for New Hampshire residents. Moody’s assigned the Bitcoin bond a provisional Ba2 rating in March.

New Hampshire to join prediction markets fight against CFTC?

With gaming authorities in many US states having already filed lawsuits against prediction market platforms like Kalshi and Polymarket over sports betting, some have speculated that New Hampshire could join the legal fight challenging the Commodity Futures Trading Commission’s (CFTC) authority. State Senator Tim Lang reportedly planned to introduce legislation restricting prediction markets in New Hampshire in April, but as of Friday, the platforms were still live in the state.

Magazine: Has Bitcoin bottomed for this cycle? Analysts say ‘not yet’

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
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