Hong Kong Monetary Authority Set to Launch Second Tokenized Green Bond in Coming Months

The Hong Kong Monetary Authority (HKMA) is gearing up to introduce its second tokenized green bond, expected to be unveiled within the next few months. 

The government authority aims to leverage blockchain technology for increased efficiency and transparency in the redemption process, according to a report from Chinese newspaper Ming Pao. 

Per the report, HKMA Chief Executive Yu Weiman disclosed plans for the upcoming “Green Finance Week” in February 2024. 

The event aims to facilitate discussions on green financial transformation, with a primary focus on organizing a global climate business forum in collaboration with the International Finance Corporation under the World Bank. 

Weiman emphasized the intention to strengthen Hong Kong’s green brand on a global scale during Green Finance Week. 

Multiple financial institutions are set to host green finance activities, with the objective of enhancing Hong Kong’s reputation in the field.

Weiman Highlights the Relationship Between Green Finance and Technology

Regarding the issuance of the second tokenized green bond, Yu Weiman underscored the symbiotic relationship between green finance and financial technology. The HKMA is actively exploring methods to conduct the redemption process within the blockchain ecosystem, aiming to enhance operational efficiency.Furthermore, the HKMA is studying the integration of blockchain technology and the Internet of Things (IoT) for tokenized green bonds. This integration will enable bondholders to gain comprehensive insights into the green projects they invest in, track their development progress, and understand the environmental impact, thereby reducing the chances of “greenwashing.”Weiman also mentioned the significant growth of Hong Kong’s green bonds and green loans, which surged to approximately US$80 billion (around HK$625.2 billion) from a mere US$11 billion just two years ago. He expressed confidence in the continued momentum of green finance, emphasizing that there is still ample room for further expansion.

Hong Kong Launches New Regulatory Regime

Back in June, Hong Kong implemented its new regulatory framework for crypto.The new rulebook allows retail investors the ability to trade virtual assets, instead of restricting digital assets trading to professional investors and traders with at least $1 million in bankable assets.As part of the new regulations, the SFC has also started providing licenses to crypto exchanges. OSL and Hashkey Group have become the first crypto exchanges in the city to receive licenses from the SFC. They also enjoy crypto-to-fiat conversion services from ZA Bank, the largest online-only bank in Hong Kong. The bank allows users of the trading platforms to withdraw crypto deposits in US dollars, Hong Kong dollars, and Chinese yuan. More recently, crypto exchange Hong Kong VAEXC (VAEX) applied for a virtual asset trading platform license with the SFC. As reported, the JPEX scandal, regarded as potentially the largest financial fraud in Hong Kong‘s history, has further prompted the Hong Kong government to expedite the approval process for cryptocurrency products to promote compliance in the industry.