Hong Kong Set to Issue Tokenized Green Bonds for Institutions

Hong Kong has announced that it will be issuing the world's first tokenized government green bonds by the end of 2023.

Speaking to local media outlets at an event on Monday, Hong Kong financial secretary Chen Maobo reiterated the city's plans to develop a vibrant ecosystem for virtual assets, and said that the Hong Kong SAR government is carrying out multiple pilot projects involving blockchain technology, including the issuance of tokenized green bonds for institutional to subscribe to.

Chen also mentioned that the government had recently completed the necessary legislative processes to establish a licensing regime for virtual asset providers.

"We need to take full advantage of the potential offered by innovative technologies, but we also need to be careful to guard against market volatility and potential risks they may cause, so as to prevent transmission of the risks and impacts to the real economy," Chan said.

According to data compiled by South China Morning Post, Hong Kong has issued more than US$7 billion of green bonds for institutional investors in recent years. The new pilot will look at the issuance and settlement of green bonds as tokens.

In an interview with CoinDesk, Christopher Hui, secretary for the Financial Services and the Treasury of Hong Kong, said that he's "most excited" about the tokenization of green bonds, which will simplify the process of issuance and investment.

Hui also said that the "blocks are ready" to build the ecosystem, and that the city has a "more solid footing", especially given the fact that the China Securities Regulatory Commission is hoping to launch a public consultation in early 2023.

“Hong Kong is a very open place. Whoever meets our law and requirements, they’re welcome," Hui said.

In November, the Hong Kong SAR Government set out its policy stance and approach towards developing a vibrant sector and ecosystem for virtual assets (VA) in Hong Kong in a post on its official blog, as the city moves towards legalizing crypto trading for retail investors and position itself as a hub for digital assets.

Last month, it was reported that three asset management companies – CSOP Asset Management, Samsung Asset Management, and Mirae Asset Global Investments – have applied with the SFC to launch ETFs (exchange-traded funds) tracking cryptocurrency futures.