The Government of the Hong Kong Special Administrative Region of the People’s Republic of China announced it had successfully tokenized 800 million Hong Kong dollars under the Government’s Green Bond Program. According to HKSAR, “this is the world’s first tokenized green bond issued by a government and it demonstrates that Hong Kong can provide a flexible and convenient legal and regulatory environment for innovative bond issuance forms.”
The Hong Kong dollar tokenized green bond was priced at a yield of 4.05% and was underwritten by four banks; two of the four banks acted as investor custodians. The settlement system for the bond is the Hong Kong Monetary Authority Central Units (HKMA CMU) where the platform is Goldman Sachs’ tokenization platform. CMU will be in charge of clearing and delivering the tokenized green bond.
This development is a first-level issue deployed on a private blockchain network, additionally “subsequent bond processes will also be carried out digitally on the private blockchain network.” “The records on the private blockchain network (on-chain records) are legally clear and final records that prove the ownership of security tokens and cash tokens by all parties on the platform, ” the HKSAR said.
Executive comments on the launched tokenized green bonds
The Financial Secretary, Paul Chan, said Hong Kong is embracing web3-related innovation and is promoting and exploring updated concepts and technologies aimed at improving financial transactions. “The successful issuance of tokenized green bonds this time marks that Hong Kong is integrating the bond market, green and sustainable finance, and the advantages of financial technology are milestones. The SAR government will continue to promote the innovative development of the financial market,” he said.
Secretary for Financial Services and the Treasury, David Hui, said market participants are welcome to launch tokenized offerings in Hong Kong.
Yu Weiwen, Chief Executive of the HKMA, said: the application of Distributed ledger technology (DLT) will enhance the use of DLT in “the potential of the bind market.” He added that “the HKMA and the government will use the experience of this issuance to cooperate with other stakeholders to launch more tokenized issuances, striving to break through the boundaries and encourage the application of technology.”
Sun Yu, Vice Chairman and President of Bank of China (Hong Kong), said: “Bank of China (Hong Kong) is honored to be the joint global coordinator, joint lead bank, joint book-runner, and custodian bank for the Hong Kong SAR government’s first tokenized green bond issuance, which just reflects the Bank’s commitment to promoting green and sustainable financial development in Hong Kong through innovative technology, as well as our long-term support for the HKMA’s green bond development initiative.”
Edouard O’Neill, Chief Executive and Head of Structured Finance Asia, CA-CIB Hong Kong said: “This offering marks a major breakthrough in innovation in Hong Kong’s capital market and lays a solid foundation for other market players in the region to digitize their assets. We are honored to assist the ongoing initiatives to promote green finance in the city and promote fintech development.”
Max Minton, Head of Digital Assets Asia Pacific at Goldman Sachs, said: “This meaningful issuance leverages Goldman Sachs’ tokenization platform, GS DAP™. Wee are excited to play a leading role in contributing to the efficiency and digitization of debt issuance.”
Lam Wai Hong, Chief Executive Officer of HSBC Hong Kong, said: “This milestone in innovation also demonstrates the potential of fully digitizing bond issuance and asset servicing processes. We look forward to continuing to work closely with the Hong Kong Monetary Authority and industry partners to strengthen Hong Kong’s position as a regional hub for green finance and fintech.”
Ma Ruijie, Managing Director of Fidelity International Asia Pacific (excluding Japan), said: “We believe that distributed ledger technology has great potential, Promote the transformation of the financial market, make it easier for investors to participate, and bring more diversified investment options with lower transaction costs through tokenization.”
Hong Kong tokenized green bonds were issued under the framework of the Hong Kong SAR Government’s Green Bond. The advisory framework and certification were provided by Vigeo Eiris and the Hong Kong Quality Assurance Agency respectively.
Read also;
EU set to Receive Applications for Blockchain Regulatory Sandbox
What do you think of this article? Share comments below.
