The Hong Kong Special Administrative Region (SAR) of the People's Republic of China has raised over $100 million through the sale of digital green bonds, marking the first time a government has issued a tokenized green bond.
The announcement was made by the Hong Kong government on Thursday, as part of its efforts to expand the use of blockchain technology in the financial sector.
To sell the bonds, the Hong Kong government appointed several major banks, including Bank of China, Credit Agricole, Goldman Sachs, and HSBC, to act as joint global coordinators, joint lead managers, and joint book runners.
The Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA) used a distributed ledger technology (DLT)-based platform developed by Goldman Sachs for the bond's clearing and settlement system.
The HKMA said in a press release that the bond's coupon payment, secondary trading settlement, and maturity redemption will be digitalized and performed on a private blockchain network.
The bond was priced on Wednesday at 4.05% and is a one-year, HKD-denominated Tokenized Green Bond.
Max Minton, Asia Pacific Head of Digital Assets at Goldman Sachs, said, "This bond…marks another significant milestone in the digitalization of capital markets."
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The successful issuance of this tokenized green bond is seen as an important step forward in promoting the adoption of distributed ledger technology (DLT) in the bond market.
According to Eddie Yue, Chief Executive of the HKMA, "DLT holds promise for revolutionizing the operation of the financial markets." He added, "This tokenized bond issuance is an important step forward in promoting the adoption and realization of the full potential of DLT in the bond market."
The Hong Kong government is encouraging market participants to conduct tokenized issuances in the city, and it plans to publish a whitepaper in the future that will summarize the experience gained from this initiative.
The paper will also "set out the next steps and provide a blueprint for issuing a tokenized bond in Hong Kong," the HKMA said in the press release.
In summary, Hong Kong's government has successfully raised over $100 million through the sale of digital green bonds, becoming the first government to issue a tokenized green bond.
The use of blockchain technology was expanded in the financial sector as a result of this move.
The government appointed major banks to sell the bonds, and the clearing and settlement system was done on a distributed ledger technology-based platform.
The successful issuance of the tokenized green bond is seen as an important milestone in promoting the adoption of DLT in the bond market.
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