The Hong Kong government announced plans for regular digital bond issuances as part of its digital assets Policy 2.0 statement in June. To date it has issued a tokenized green bond in 2023 and a far larger natively digital green bond issuance in 2024 of more than $750 million. According to Bloomberg, it has now appointed the banks for the third sale, but no further details were shared.
The first issuance used Goldman Sachs’ GS DAP blockchain platform, with the second used HSBC’s Orion. HSBC’s platform was integrated with the central securities depository CMU, allowing investors to buy the bond via blockchain or in the conventional manner. Other platforms, including those owned by Euroclear and SIX, have adopted a similar path of integrating with the CSD to ensure that being natively digital doesn’t make the bond less liquid.
A big question is which platform will be used for the third Hong Kong issuance. This year HSBC’s Orion Hong Kong platform has hosted four bond issuances totaling $890 million, and accounts for a significant proportion of all issuances. However, the European Investment Bank (EIB), which has issued six digital bonds and has a similar goal of encouraging innovation, deliberately used a variety of platforms.
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