HK Bolsters Fintech, Sustainable Finance with Multi-Currency Digital Green Bond Offering

The Government of the Hong Kong Special Administrative Region (HKSAR) announced the successful issuance of approximately HK$6 billion in digital green bonds, marking a significant advancement in the integration of fintech and green finance.

This initiative, part of the HKSAR Government’s Green Bond Programme, is distinguished by its multi-currency offering, encompassing Hong Kong dollars (HKD), Renminbi (RMB), US dollars (USD), and euro (EUR), showcasing the region’s commitment to environmental sustainability and technological innovation in financial services.

The two-year bonds garnered attention from a broad spectrum of global institutional investors, including prominent asset managers, banks, insurance companies, private banks, and non-financial corporates, highlighting the diverse interest in green investments and digital finance.

The bonds were issued in four tranches, featuring competitive interest rates: 3.800 percent for HKD, 2.900 percent for RMB, 4.749 percent for USD, and 3.647 percent for EUR, signaling strong market confidence in Hong Kong’s green initiatives and digital asset infrastructure.

This offering builds upon the HKSAR Government’s pioneering efforts in tokenized green bonds, initiated in February 2023, and draws on insights from Project Genesis, a collaborative exploration of tokenized green bonds by the Hong Kong Monetary Authority (HKMA) and the Bank for International Settlements Innovation Hub Hong Kong Centre.

Innovations introduced with this issuance aim to enhance market efficiency and interoperability, including broadening investor participation, streamlining issuance processes, integrating green bond disclosures on digital platforms, and adopting the International Capital Market Association’s Bond Data Taxonomy.

The Central Moneymarkets Unit (CMU) will manage the clearing and settlement of these Digital Green Bonds, with HSBC Orion acting as the digital assets platform.

This issuance is notable for being the world’s first multi-currency digital bond and Hong Kong’s inaugural digitally native bond issuance, underlining the region’s leadership in green and sustainable finance as well as in financial technology.

Christopher Hui, the Secretary for Financial Services and the Treasury, underscored the government’s dedication to fostering innovation in bond issuances and supporting the green transformation, aiming to solidify Hong Kong’s position as a premier hub for green and sustainable finance.

Eddie Yue, Chief Executive of the HKMA, echoed this sentiment, highlighting the issuance’s role in promoting digital securities market development and encouraging the adoption of digitalization technology.

This strategic move by the HKSAR Government and its key financial partners, including HSBC, Bank of China (Hong Kong), and UBS, not only advances the region’s green finance agenda but also sets a precedent for integrating digital technology into the global financial landscape.

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