• Hong Kong’s central bank successfully issued its first tokenized green bond of 800 million Hong Kong dollars (US$101 million).
• The bond was offered under the government’s Green Bond Program and is the first green bond to be issued by a government globally.
• This issuance was in collaboration with Bank of China (Hong Kong), Crédit Agricole CIB, HSBC and Goldman Sachs as the platform provider.
Hong Kong Issues Inaugural Tokenized Green Bond
Hong Kong’s central bank had been exploring tokenization of green bonds since at least 2021. On February 16, 2023 it successfully issued its first tokenized green bond of 800 million Hong Kong dollars (US$101 million). It is the first green bond to be issued by a government globally, under the government’s Green Bond Program.
Collaboration for Bond Issuance
The 365-day bond at 4.05% yield was offered in collaboration with Bank of China (Hong Kong), Crédit Agricole CIB and HSBC – with Goldman Sachs as the platform provider. The bond is not for distribution in the U.S., Canada, Japan or any other prohibited jurisdiction.
Processes Digitalized on Private Blockchain Network
Processes of the bond lifecycle, including coupon payment, settlement of secondary trading and maturity redemption, were digitalized and performed on a private blockchain network. This tokenization allows these bonds to be sold digitally and with ease.
Government Policy Statement
Christopher Hui, secretary for Financial Services and the Treasury said that “Green bond tokenization is one of the pilot projects announced in the Government’s Policy Statement on Development of Virtual Assets in Hong Kong”. Through clear policy stance and road map, the Government will work towards providing a facilitating environment to promote sustainable and responsible development of virtual assets sector. He welcomed market participants to conduct tokenized issuances in Hong Kong.
The successful issuance of this inaugural tokenized green bond shows promise for future issues from governments around the world as well as an increase in adoption/interest from investors who value sustainability investments like these bonds offer them