Hong Kong’s government has reiterated its commitment to promoting fintech innovation following the issuance of around HK$6 billion worth of digital green bonds.

This is the second issuance of digital bonds, with the first issued back in February 2023. The Hong Kong Monetary Authority (HKMA) finalised the so-called Project Genesis in 2021, working alongside the Bank for International Settlements Innovation Hub Hong Kong Centre to trial the issuance of tokenised green bonds in Hong Kong, The Fintech Times reports.

Hong Kong’s Financial Secretary, Paul Chan, stated: “The government has once again issued digital green bonds this year, incorporating various technological innovations. This demonstrates Hong Kong’s strengths and leadership position in combining the bond market, green and sustainable finance, and fintech.

“We will continue to promote innovation and application of fintech, explore the use of new technologies to enhance the efficiency, transparency, and security of financial transactions, and foster vibrant development in various sectors of the financial market.”

Meanwhile, Christopher Hui, the Secretary for Financial Services and the Treasury, said of the digital green bonds: “The second issuance of digital green bonds demonstrates the government’s continuous support to innovative forms of bond issuances and green transformation.

“We are confident that this issuance will further entrench the social awareness of sustainable development in combination with fintech and consolidate Hong Kong’s status as a leading green and sustainable finance hub.”

This latest issuance, expanding upon Project Genesis, presents enhancements in investor engagement, simplifying the issuance procedure, standardisation, and transparency. Global investors can now engage with Digital Green Bonds via Euroclear or Clearstream, which improves liquidity and potential interoperability.

Issuing bonds in a digital format removes the necessity for conversion while embracing the Bond Data Taxonomy standardises terminology for market efficiency. Meanwhile, the incorporation of green bond disclosures into the digital assets platform improves transparency and accessibility.

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