London Metal Exchange Explores Tokenizing Metal Inventory in Hong Kong Warehouses for Loan Collateral Financing

October 29: According to Reuters, the London Metal Exchange (LME), owned by Hong Kong Exchanges and Clearing (HKEX), plans to turn metal held in its Hong Kong warehouses into digital assets that can be used for financing. Three people familiar with the matter said the plan is tied to Hong Kong's five-year plan to expand its commodities trading hub, is expected to attract investors, traders and financiers, and would bring the LME a new revenue stream. The LME said it is at an early stage of exploring the tokenization of metal inventory that is not covered by warehouse receipts to support corporate financing, and plans to hold an invitation-only industry roundtable in early November.

Hong Kong's plan says it will leverage its position as a recognized delivery point in the LME's global warehouse network to promote the coordinated development of commodities trading, risk management and financing businesses. HKEX is also testing the conversion of carbon credits into digital tokens to enable rapid settlement.