The Government of the Hong Kong Special Administrative Region (HKSAR Government) announced today (16th) the successful sale of HK$800 million in tokenized green bonds under the Government Green Bond Program (Green Bond Program). This is the world’s first tokenized green bond issued by a government.
According to the press release, the 1-year Hong Kong dollar tokenized green bond held an online roadshow earlier this week and was priced yesterday with a yield of 4.05%. The relevant offering was underwritten by four banks, two of which also acted as custodians for investors. The Central Monetary Unit for Debt Instruments (CMU) of the Hong Kong Monetary Authority (HKMA) is the settlement and settlement system for the bonds, and the platform is Goldman Sachs’ tokenization platform GS DAPTM.
This primary issuance is used on a private blockchain network to settle security tokens3 representing beneficial interests in the bonds and cash tokens representing claims against the Hong Kong dollar legal tender of the Hong Kong Monetary Authority on a T+1 payment-versus-payment (DvP) basis. Subsequent bond processes (including coupon payment, secondary market transaction settlement and maturity redemption) will also be conducted digitally on the private blockchain network.
This tokenized green bond is settled and settled through CMU, and transactions conducted through CMU benefit from statutory settlement finality under Hong Kong law. 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.
As the first batch of tokenized bonds governed by Hong Kong law, this issuance demonstrates that Hong Kong can provide a flexible and convenient legal and regulatory environment for innovative forms of bond issuance. As the representative of the Hong Kong SAR government under the green bond program, the Hong Kong Monetary Authority will issue a white paper in due course to summarize the experience of this issuance and look forward to the next step to provide reference for the issuance of tokenized bonds in Hong Kong.
Financial Secretary Paul Chan Mo-po said: "Hong Kong has been actively promoting the application of innovative technology in the financial field and actively exploring the use of new concepts and technologies to improve the efficiency, transparency and security of financial transactions. We published a report on Hong Kong's virtual assets in October last year The policy declaration for development shows that we actively embrace financial innovation related to the third generation Internet (Web3) and promote the steady and prudent development of the market. This successful issuance of tokenized green bonds marks Hong Kong’s integration of bond markets, green and sustainable finance. , and its advantages in financial technology, which is a milestone. The SAR government will continue to promote the innovative development of the financial market.”
Secretary for Financial Services and the Treasury Henry Hui Ching-yu said: "Green bond tokenization is one of the pilot projects announced by the government in the policy declaration on the development of virtual assets in Hong Kong. Through a clear policy stance and roadmap, the government will strive to facilitate environment to enable the virtual asset industry to develop sustainably and responsibly. We welcome market participants to launch tokenized issuance in Hong Kong.”
Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, said: "Distributed ledger technology (DLT) is very promising and can bring innovation to the operation of financial markets. The Hong Kong Monetary Authority and the Hong Kong Center under the Bank for International Settlements Innovation Hub will complete Project Genesis in 2021, which is the next generation of Tokenized green bonds go one step further on the basis of this project, using cash tokens issued by the Hong Kong Monetary Authority to realize on-chain DvP settlement, which promotes the application of DLT and brings us closer to fully utilizing DLT in The potential of the bond market. The HKMA and the government will use the experience of this issuance to launch more tokenized issuances in cooperation with other stakeholders, striving to push the boundaries and encourage technology applications.”
Sun Yu, Vice Chairman and President of Bank of China (Hong Kong), said: "Bank of China (Hong Kong) is very honored to be the joint global coordinating bank, joint lead bank, joint bookrunner and custodian bank for the Hong Kong SAR government's first tokenized green bond issuance. , which reflects the Bank’s commitment to promoting green and sustainable financial development in Hong Kong through innovation and technology, as well as our long-term support for the Hong Kong Monetary Authority’s green bond development initiatives. This bond issuance has received high attention from institutional investors, and it also fully proves that Hong Kong. The diversity and innovation of the financial market. We believe that the evolution and application of virtual assets in green bond programs will help consolidate Hong Kong’s leading position as a green and sustainable finance center in the Asia-Pacific region.”
Edouard O'Neill, Chief Executive Officer and Head of Asia Structured Finance, Hong Kong Branch of Crédit Agricole CIB, said: "Crédit Agricole is delighted to have the opportunity to collaborate with the Hong Kong Monetary Authority on the first tokenized green bond issuance for the Hong Kong SAR Government. This issuance "
Max Minton, Head of Digital Assets Asia Pacific at Goldman Sachs, said: "This issuance demonstrates the leadership and innovation capabilities of the Hong Kong Monetary Authority in the field of green finance and marks another important milestone in the digitalization process of the capital market. This unique issuance utilizes We are excited to play a major role in GS DAP, Goldman Sachs’ tokenization platform, contributing to greater efficiency and digitization of debt issuance.”
Christine Lam, CEO of HSBC Hong Kong, said: "HSBC has always supported the green bond program of the Hong Kong Special Administrative Region government. This is the first time the government issuance of tokenized green bonds, and we are very honored to participate in it. Tokenized green bonds not only mark the development of the capital market This innovative milestone also demonstrates the potential of digitizing all bond issuance and asset servicing processes. We look forward to continuing to work closely with the Hong Kong Monetary Authority and industry partners to consolidate Hong Kong’s position as a regional hub in green finance and financial technology.”
Ruijie Ma, Managing Director of Fidelity International Asia Pacific (excluding Japan), said: "We are pleased to participate in this innovative issuance on behalf of our clients. This is an important step in Hong Kong's digital asset market practice. We believe that distributed ledger technology has huge potential, Promote the transformation of financial markets, make it easier for investors to participate, and bring more diversified investment options with lower transaction costs through tokenization.”
The tokenized green bond was issued under the Hong Kong SAR Government’s Green Bond Framework (Framework). Vigeo Eiris has provided independent advice on the framework, and the tokenized green bond has also received pre-issuance certification from the "Green and Sustainable Finance Certification Scheme" issued by the Hong Kong Quality Assurance Agency.
Summary of this tokenized green bond issuance
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