Uber uses HSBC tokenised deposits for weekend fund liquidity

Uber has tested a way to keep its spare cash invested and earning a return over weekends and outside banking hours, using digital versions of HSBC bank deposits to buy and sell shares in a Franklin Templeton money market fund.

In the pilot, announced on Friday 30 October, Uber used HSBC’s tokenised deposits (bank deposits represented as digital tokens) to buy tokenised shares in the fund through Tradeweb’s trading platform. The trades settled on the Canton Network, a public blockchain designed for institutional finance, with Fireblocks providing the wallet technology. Cash and fund shares changed hands simultaneously, a method known as delivery versus payment (DvP), which reduces settlement risk. Uber was also able to sell part of its holding over a weekend while continuing to earn yield on the rest.

Corporate treasurers typically face cut-off times and settlement cycles of T+1 or longer when redeeming money market fund shares or moving bank funds outside core hours, the firms said. As a result, some companies hold large uninvested cash buffers or rely on overdrafts and credit lines.

“This pilot is an important first step in our journey towards a more efficient, 24/7 model for managing our working capital,” said Odette Rodrigues, vice president of corporate finance, treasury and capital markets at Uber.

In the pilot, the cash leg and the fund shares settled together in a single synchronised transaction. The tokenised deposits are deposit liabilities of HSBC Bank USA, representing commercial bank money held in demand deposit accounts, and are insured by the Federal Deposit Insurance Corporation (FDIC) up to applicable limits. Redemption proceeds can only settle to corporate bank accounts that have passed know-your-customer (KYC) checks. The fund shares are not bank deposits and are not FDIC-insured.

Tradeweb’s electronic trading infrastructure coordinated execution and on-chain settlement. Fireblocks provided the wallet technology, which lets treasurers set controls over wallet assets, signing rules and user entitlements.

“Demonstrating interoperability of HSBC Tokenized Deposits on the Canton Network enables seamless delivery-vs-payment, empowering clients to deploy capital more effectively, while benefiting from 24/7 liquidity and continuous yield,” said Manish Kohli, head of global payments solutions at HSBC.

Matt Jones, head of liquidity distribution at Franklin Templeton, said: “Connecting tokenised investment products with bank-issued tokenised deposits is an important step towards making digital assets more useful in institutional treasury operations.”

Meanwhile, Daniel Staniford, co-head of corporate and head of global corporate sales at Tradeweb, said the pilot explored how the platform’s existing treasury workflows could extend to tokenised money market funds and digital cash.

“As digital asset infrastructure matures, we see corporate treasury as a practical application, supported by the platforms clients use today,” he added.

Yuval Rooz, co-founder and chief executive of Digital Asset, which created Canton, said: “Canton allows liquidity to move across institutional boundaries with the privacy and control the market requires, replacing fragmented operating windows with infrastructure that can function continuously.”