Hong Kong Raises $102M With First Tokenized Green Bond Offering
Hong Kong said it has successfully sold $102 million worth of digital green bonds, marking the first tokenized green bond issued by a government. The sale comes just a month after a Hong Kong official said the government is looking to launch tokenized green bonds for institutional investors.
Hong Kong Becomes the First Government to Issue a Tokenized Green Bond
The Hong Kong government announced Thursday it has successfully raised 800 million HKD ($102m) through the sale of digital green bonds, expanding the use of the burgeoning blockchain technology. The move represents the first tokenized green bond issued by a government, with a yield of 4.05%.
The Hong Kong government hired several major banks including Bank of China, Goldman Sachs, Credit Agricole, and HSBC, to hold investor calls for the issuance of tokenized green notes. The officials said the beneficial interest in the notes will be stored on a distributed ledger technology-based (DLT) platform developed by Goldman Sachs.
“Following a virtual roadshow earlier this week, the one-year, HKD-denominated Tokenised Green Bond was priced yesterday at 4.05%. It was distributed by a four-bank syndicate, two of which also act as investor custodians. The Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA) is the clearing and settlement system for the bond, leveraging Goldman Sachs’ tokenization platform – GS DAP”– the HKMA said in the press release.
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Hong Kong to Provide a Blueprint for Issuing Tokenized Bonds
As the first tokenized bond issued and managed by the Hong Kong government, the sale indicates that the city’s legal and regulatory environment is supportive of innovative forms of bond issuances. In addition, the government plans to publish a whitepaper in the future to summarize the experience gained from this initiative, as well as “set out the next steps and provide a blueprint for issuing a tokenized bond in Hong Kong,” Hong Kong Monetary Authority said in the press release.
Hong Kong’s debut digital green bond sale represents the latest push by the special administrative region to restore its financial hub status following years of turmoil during the coronavirus pandemic. The city has shown interest in exploring blockchain technology and its potential applications such as developing a central bank digital currency (CBDC).
Meanwhile, digital bonds are still a relative novelty, with Singapore’s banking giant DBS among the notable pioneer issuers so far. Earlier this week, DBS said it plans to apply for a license in Hong Kong to offer crypto trading services.
Do you think global governments should show more interest in using DLT? Let us know in the comments below.