Hong Kong Successfully Offered Inaugural $100M Tokenized Green Bond

Hong Kong's central bank had been exploring tokenization of green bonds since at least 2021.

AccessTimeIconFeb 16, 2023 at 11:53 a.m. UTC
Updated Feb 16, 2023 at 3:48 p.m. UTC

Hong Kong's government successfully issued its first tokenized green bond of 800 million Hong Kong dollars (US$101 million), according to an announcement on Thursday.

The bond was offered by the government of the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR) under its Green Bond Program, and is the first green bond to be issued by a government globally, the announcement by the Hong Kong Monetary Authority said.

"Processes of the bond lifecycle, including coupon payment, settlement of secondary trading and maturity redemption, will also be digitalized and performed on the private blockchain network," the government said.

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, the announcement added.

The Hong Kong Monetary Authority had been looking into tokenized green bond issuance since at least 2021. Green bonds are issued to finance eco-friendly projects, while tokenization allows the bonds to be sold digitally and with ease.

"Green bond tokenization is one of the pilot projects announced in the Government’s Policy Statement on Development of Virtual Assets in Hong Kong," said Christopher Hui, secretary for Financial Services and the Treasury, in a statement to the press. "Through a clear policy stance and road map, the Government will work towards providing a facilitating environment to promote sustainable and responsible development of the virtual assets sector. We welcome market participants to conduct tokenized issuances in Hong Kong.”

UPDATE (Feb. 16, 2023 12:02 UTC): Adds more detail about the bond in fourth paragraph and the quote by Christopher Hui in last paragraph.


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