By Michael Scott
The Hong Kong government’s detailed announcement marked the successful issuance of pioneer tokenized green bonds. The country’s central bank announced on February 16 the project’s conclusion to explore tokenizing green bonds that began in 2021.
Inaugural Green Bond Program
The early Thursday communication by the government marked the successful issuance of HK$800 million. The bond’s inaugural issuance was undertaken via the guidance of the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR). The Hong Kong Monetary Authority (HKMA) indicated that the Green Bond Program marks the initial issuance for any government globally.
The government representative revealed plans for digitizing lifecycle processes, redeeming maturity, coupon and secondary trading settlement. He added that the lifecycle process would onboard the private blockchain network.
Collaborated Project in Green Bond Issuance
HKMA revealed that the bond would feature a 4.05% annual yield in collaboration with HSBC, Credit Agricole CIB, and Bank of China in Hong Kong. The bond leverages Goldman Sachs in providing the platform. The government representative ruled out the bond’s distribution within Japan, the US and Canada.
The project features Goldman Sachs in partnership with Thailand’s Krungthai Bank to undertake the green bond experiment in the country’s Genesis 2 project. By January, the HKMA confirmed plans to tokenize the bond issuance. The objective was fuelled by a successful institutional $5.75 billion sale of green bonds.
The HKMA spokesperson confirmed exploring the issuance of tokenized green bonds in 2021. The authority’s executive revealed that Green Bond issuance targeted at financing eco-friendly projects. He added that tokenizing the issuance would facilitate their sale digitally.
Government Devotion to Tokenizing Green Bond
The country’s Secretary for Financial Services and Treasury, Christopher Hui, indicated that green bond tokenization constitutes a critical pilot project within the government’s Development of Virtual Assets policy statement.
Hui reassured the bond enthusiasts the Hong Kong government would devote itself to facilitating a clear roadmap that will offer sustainable development of virtual assets. Its accomplishment would promote responsible development by welcoming market participants to assume tokenized issuances in the country.
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