Hong Kong Uses Blockchain Technology to Strengthen Green Bonds Initiative

December 20, 2023

By Anjali Kochhar

By combining the knowledge of five major banks, including Credit Agricole CIB and HSBC Holdings Plc, to spearhead a series of digital green bond offerings, Hong Kong has made a big step toward becoming a leader in digital asset finance in Asia.

This project demonstrates the city’s dedication to fusing cutting-edge financial technology with environmentally friendly methods. It uses blockchain technology to increase the effectiveness and transparency of its financial sector.

Hong Kong’s Engagement with Green Bonds

The government’s decision to engage leading financial institutions such as Bank of China (Hong Kong), Industrial and Commercial Bank of China (Asia) Ltd. and UBS Group AG demonstrates a strong commitment to exploring the potential of digital native green bonds.

These bonds mark the beginning of a new era in sustainable financing and will be registered on a distributed ledger technology platform. Furthermore, because they are multi-currency bonds with values in dollars, euros, offshore yuan, and Hong Kong dollars, they support Hong Kong’s goal of drawing in a worldwide investor base and strengthening its standing as a center for cutting-edge financial solutions.

This action comes after Hong Kong successfully issued 365-day tokenized green notes worth HK$800 million ($102 million) earlier this year.

The initiative is being led by the Hong Kong Monetary Authority

Leading this project is the Hong Kong Monetary Authority (HKMA), which demonstrates the city’s commitment to use advanced financial techniques to boost the economy.

Eddie Yue, the CEO of HKMA, emphasized the significance of this endeavor at the Hong Kong Economic Summit 2024, saying that Hong Kong must take the initiative to pursue its own growth chances and give its economy a boost.

Overview of the Hong Kong Bond Market

Hong Kong dollar debt (HKD), offshore renminbi debt (CNH), and Asia G3 international bond offerings are the three primary market categories. The entire amount of bonds issued in HKD was US$169.9 billion, in CNH it was US$137.6 billion, and in Asian G3 it was US$716.9 billion by the end of 2022.

Debt Segment in Hong Kong Dollars (HKD)

At US$115.6 billion, the amount of new HKD bonds issued in 2022 was little less than that of the previous year. In terms of volume, the most active entities were foreign issuers outside of multilateral development banks and authorized institutions.

Market for Offshore Renminbi Debt (CNH)

With a 24% increase in new bond issuance, this segment saw tremendous growth, reaching a total of US$99.7 billion in 2022. The surge in certificates of deposit issuing was the primary cause of the increase.

About the author

Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.

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