Hong Kong to Launch Third Blockchain-Based Green Bond Sale

• Hong Kong is launching its third blockchain-based green bond, marking continued expansion into tokenized capital markets.
• The bonds, rated AA+ by S&P, will be issued in USD, EUR, offshore yuan, and HKD, with settlement handled via HSBC’s blockchain infrastructure.
• The sale supports climate-focused projects and advances Hong Kong’s goal to become a global hub for tokenized and sustainable finance.

Hong Kong is preparing to issue its third round of government-backed blockchain-based green bonds, signaling the city’s growing commitment to digital finance and tokenized capital markets.

According to a report, the upcoming issuance will be denominated in multiple currencies, including US dollars, euros, offshore yuan, and Hong Kong dollars. And, it could be priced as early as today. The sale follows similar digital bond offerings in 2023 and 2024, as Hong Kong cements its position as a leading global hub for blockchain-enabled financial infrastructure.

The latest issue will be fully native to blockchain platforms, meaning the bonds will be created, distributed, and settled entirely on-chain. HSBC will provide the technical infrastructure for issuance and settlement. The bonds have received an AA+ rating from S&P, underscoring the market’s confidence in the city’s sovereign creditworthiness despite the novel use of digital systems.

The proceeds will be directed toward environmental and climate-focused projects, maintaining Hong Kong’s commitment to sustainable finance under its green bond program. This dual focus on digital innovation and environmental impact highlights how the city aims to merge its climate goals with its ambitions as a tokenization leader.

Corporate demand for blockchain-based debt is already rising in the city. Since 2023, at least six tokenized corporate bonds have been issued in Hong Kong, collectively raising over $1 billion, including deals from state-backed firms such as Shenzhen Futian Investment Holdings and Shandong Hi-Speed Holdings Group.

S&P said that while digital issuance introduces new operational risks, Hong Kong’s model incorporates a “fail-safe” mechanism that allows the bonds to revert to traditional systems if necessary, ensuring both innovation and investor protection.

As competition intensifies with other financial hubs like Singapore and Dubai, Hong Kong’s third digital bond sale marks another strategic step in transforming its capital markets into a global center for tokenized finance.

Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.

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