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Magyar29 Oct 2026
The London Metal Exchange is exploring tokens backed by off-warrant metal in its Hong Kong warehouses, to be used for financing such as loan collateral. The plan, reported by Reuters, is at an early stage and ties into Hong Kong's five-year commodities hub strategy.
Markets TradeReviewed News Desk
The London Metal Exchange (LME) is exploring a plan to turn metal held in its Hong Kong warehouses into digital tokens that companies could use for financing, for example as collateral for loans. Reuters reported the plan on October 28, citing three people with knowledge of the matter, and linked it to Hong Kong’s new five-year plan to grow its commodities hub.
The exchange confirmed it is looking at the idea. “The LME is at the early stages of exploring the tokenisation of off-warrant metal inventories to support financing of business,” it said in response to Reuters. No blockchain, token structure or launch date has been announced.
Why off-warrant metal
The plan only covers so-called off-warrant metal. Metal on warrant already comes with LME title documents that let it be traded or pledged as loan collateral. Off-warrant stocks sit in LME-approved warehouses but lack a standard way to be financed. The LME has required its warehouses to report off-warrant stocks since 2020 to give the market a fuller view of supply of metals such as copper and aluminium.
According to the Reuters sources, metal-backed tokens are meant to draw in investors, traders and financiers, a goal set out in Hong Kong’s economic blueprint published in September, and would give the LME a new revenue stream. The exchange has been owned by Hong Kong Exchanges and Clearing (HKEX) since 2012. An invitation-only industry roundtable on the plan is set for early November.
Part of a wider Hong Kong tokenization push
The report follows comments from Hong Kong’s Secretary for Financial Services and the Treasury Christopher Hui on October 23. As China Fintech reported, HKEX aims to start a pilot next year in which designated banks lend against tokenised warehouse receipts, and is building a blockchain-based tokenization platform that will hold receipts from LME-approved warehouses, with its own pilot planned for 2027.
What it means for traders
This is not a token crypto traders can buy today, and the plan is still at an early stage. It is, however, another sign that real-world asset (RWA) tokenization is moving from crypto-native projects into the core of traditional commodity markets. Headlines like this tend to support the RWA narrative, so watch tokenization-related tokens and gold-backed stablecoins for short-term reactions, and keep in mind that the roundtable in early November is the next concrete step.
If you trade RWA tokens or tokenized gold, spreads and fees vary a lot by venue. Compare them in our crypto exchange comparison, where BingX ranks first and OKX second, or read how we test exchanges.
For information only, not financial advice.
Sources
- Reuters via Euronext: Exclusive: LME plans metal tokens push tied to Hong Kong’s 5-year plan, sources say
- China Fintech: Tokenised warehouse receipts pilot at HKEX
- Watcher.Guru: London Metal Exchange to tokenize metals stored in Hong Kong
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Sources
- Reuters via Euronext: Exclusive: LME plans metal tokens push tied to Hong Kong's 5-year plan, sources say
- China Fintech: Tokenised warehouse receipts pilot at HKEX
- Watcher.Guru: London Metal Exchange to tokenize metals stored in Hong Kong
News is for information only and is not financial advice. More crypto news
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