The Hong Kong Monetary Authority announced on February 16 that it had successfully issued an HK$800 million tokenized green bond. The issuance is digitally issued on a private blockchain network using the Hong Kong Monetary Authority's Central Monetary Unit for Debt Instruments (CMU) as the settlement and delivery system, and using Goldman Sachs' tokenization platform GS DAP.
Goldman Sachs Tokenization Platform GS DAP
The American investment bank Goldman Sachs recently announced that its digital asset platform GS DAP has been officially launched. It is a digital asset platform developed in partnership with blockchain software company Digital Asset using the Daml smart contract language and the privacy-enabled blockchain Canton.
The goal of this platform is to help clients achieve start-to-finish digital lifecycle processing across tokenized assets, digital currencies and other financial instruments. Last November, Goldman Sachs, together with Santander and Société Générale, underwrote a 100 million euro bond issuance for the European Investment Bank (EIB), through which assets can be tokenized on a distributed ledger and exchanged simultaneously, which is called atomic delivery. , instead of traditional finance having to use another intermediary’s simultaneous delivery mechanism (Delivery vs. Payment, DvP), the whole process only takes 60 seconds. A traditional initial bond sale takes about five business days.
Tokenized Green Bonds
The tokenized green bond was issued under the Hong Kong SAR Government’s Green Bond Framework. Using Goldman Sachs' private blockchain platform GS DAP, both bonds and Hong Kong dollars are tokenized, and then settled using the T+1 next-day delivery bond synchronized delivery mechanism. Afterwards, the bond dividend distribution, secondary market transactions and Date redemptions will be conducted digitally on a private blockchain.
The bonds this time were settled and delivered through the Central Clearing and Clearing System (CMU) of the Hong Kong Monetary Authority, which provides services such as securities transfer and collateral management. bond managers, custodians, agents and operating agencies.
Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, said:
Distributed ledger technology (DLT) holds great promise and can revolutionize the functioning of financial markets. The Hong Kong Monetary Authority and the Hong Kong Center under the Innovation Hub of the Bank for International Settlements completed Project Genesis in 2021, and this tokenized green bond goes a step further on the basis of this project, using cash tokens issued by the Monetary Authority to realize on-chain DvP transactions. It promotes the application of DLT and brings us closer to fully realizing the potential of DLT in the bond market. The HKMA and the government will use the experience from this issuance to launch more tokenized issuances in collaboration with other stakeholders, striving to push boundaries and encourage technology applications.
In addition, Hong Kong is also actively participating in BIS's various central bank currency CBDC plans, such as Project Aurum, a wholesale CBDC two-tier model, and Project Aurum, which is working with Thailand, China and the United Arab Emirates to test a CBDC connected to the real economy. mBridge.
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