Hong Kong plans first digital green bond offering, said to target US$102 million proceeds

Name: Scientists keep an ear on coral reef health by monitoring ocean sounds off Indonesian coast
Uploaded: 2023-02-13T07:09:23.000Z
Duration: 2 min 36 s
Description: Scientists keep an ear on coral reef health by monitoring ocean sounds off Indonesian coast

The government has asked the Bank of China, Credit Agricole, Goldman Sachs and HSBC to hold investors calls on Monday, Bloomberg reports

The tokenised notes would be a ‘pilot issuance’ to test regulatory framework and financial infrastructure, a top government official said last week

Reading Time:2 minutes

Why you can trust SCMP

Hong Kong’s government issued US$5.75 billion in green bonds last month, denominated in US dollars, euro and renminbi. Photo: Reuters

Mia Castagnone

Published: 3:09pm, 13 Feb 2023Updated: 4:34pm, 13 Feb 2023

The Hong Kong government is preparing to sell its first digital green bonds as early as this week, a move that one top official said will test the city’s existing legal and regulatory framework amid a push into sustainable financing and virtual assets.

Proceeds from the proposed local-currency notes will be used to finance or repay eligible projects under the city’s green bond framework, Fitch Ratings said in a note on Sunday. A blockchain-underpinned technological platform is involved in relation to the issuance of the securities, it added.

The government hopes to raise HK$800 million (US$102 million) and has asked the Bank of China, Credit Agricole, Goldman Sachs and HSBC to hold investor calls on Monday, according to a Bloomberg report. The interest earned on the tokenised notes will be recorded on a blockchain platform provided by Goldman Sachs, it added.

Joseph Chan, Hong Kong’s under secretary for financial services and the Treasury, last week indicated the tokenised green bonds would be a “pilot issuance to test out the compatibility of Hong Kong’s existing framework, financial infrastructure [and] market operational practice.”

02:36

Scientists keep an ear on coral reef health by monitoring ocean sounds off Indonesian coast

Digital bonds are a relatively new concept. Singaporean bank DBS was the first in Asia to automate bonds, while the European Investment Bank is also among notable lenders to have offered them.

Chan had earlier indicated that the offering would be relatively small and that the Hong Kong Monetary Authority (HKMA) will provide guidance for future issuers to scale up. The tokenised debt will be launched under the Government Green Bond Programme, the biggest of its kind in Asia.