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Hong Kong to launch world’s first tokenized green bonds by 2022-end

14 Nov, 20223 min readOther
Hong Kong to launch world’s first tokenized green bonds by 2022-end

Hong Kong will soon issue the first-ever tokenized government green bonds. In fact, reports suggest Hong Kong will also reportedly legalize retail cryptocurrency trading.

Hong Kong’s financial authorities have released a statement on their commitment to better regulating the cryptocurrency sector. The financial secretary also disclosed several trial programs in the official notice. The release of a fresh batch of tokenized green bonds for institutional investors is the most prominent of them.

According to the notification, the issuance of government green bonds will begin by the end of the year. As a result, it would be the first government green bond ever to be tokenized.

Hong Kong on crypto-regulations

Financial Secretary Paul Chan Mo-Po stated that financial authorities are eager to utilize decentralized technology. He said,

“We need to take full advantage of the potential offered by innovative technologies, but we also need to be careful to guard against market volatility and potential risks they may cause, to prevent transmission of the risks and impacts to the real economy.”

The announcement mentioned a digital Hong Kong dollar and referred to a central bank digital currency (CBDC). How it could act as “the ‘backbone’ and pillar connecting legal tender and virtual assets” would be the main topic of the investigation. Additionally, Hong Kong’s Monetary Authority disclosed the results of a follow-up consultation on stablecoin regulations.

Along with a plan to allow cryptocurrency trading, Hong Kong wants to improve the regulatory oversight of crypto-businesses. According to sources, “a planned required licensing program for crypto-platforms” may become a reality by March.

In fact, regulators will allow a list of larger tokens but won’t support any particular cryptocurrencies. The goal of the entire operation is to reignite interest in Hong Kong as a global financial center. It appears that a significant component of the policy will also include mandatory licensing.

Blockchains that may only be viewed by authorized users are referred to as “permissioned” blockchains and they will be used by the Swiss company Digital Asset and its Hong Kong partner, GFT Technologies Hong Kong. Blockchains without authorization will be implemented by the Liberty Consortium.

Impact of the FTX Collapse

The market turmoil caused by FTX’s stunning collapse and the declaration of a new policy focus is related. The new trend has only encouraged regulators to tighten their oversight of the cryptocurrency business and Hong Kong is no exception.

Here, it’s worth noting that according to the announcement, this is the first green finance project the BIS Innovation Hub has started.

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