Hong Kong Plans Up to $2.6 Billion Digital Green Bond Sale, Set to Be World’s Largest
Summary
- Hong Kong is preparing to issue digital green bonds worth as much as $2.6 billion in what would be the world’s largest digital bond sale.
- The Hong Kong government said the bonds will be issued in four currencies — the U.S. dollar, Hong Kong dollar, euro and offshore yuan — and that the coupon could be set as early as next Monday.
- Chief Executive John Lee said Hong Kong plans to make digital bond issuance a regular practice and promote digital-currency settlement and blockchain-based interest payment and redemption procedures.
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Hong Kong is preparing to sell as much as $2.6 billion of digital green bonds, in a push to expand the blockchain-based bond market.
Bloomberg reported on Sept. 24 that the Hong Kong government is arranging a digital green bond offering of HK$15 billion to HK$20 billion, equivalent to about $1.9 billion to $2.6 billion. If completed as planned, it would be the world’s largest digital bond sale.
The bonds are expected to be issued in four currencies: the U.S. dollar, the Hong Kong dollar, the euro and offshore yuan. The government is holding investor meetings with financial institutions this week, and pricing could be set as early as next Monday.
Digital bonds use blockchain technology for issuance, trading and settlement. Hong Kong aims to link green finance with asset tokenization to energize its bond market and strengthen its position as a major bond-trading hub in Asia.
Hong Kong sold about HK$10 billion of digital bonds last year. In June, the Hong Kong Mortgage Corp. issued HK$12 billion of digital bonds, setting what was then a world record. This deal would top that mark if it goes ahead.
The Hong Kong government said digital bonds issued in the city accounted for about 50% of the global market from last year through the first half of this year. Chief Executive John Lee has said the government plans to make digital bond issuance a regular practice and advance settlement using digital currencies, as well as blockchain-based interest payments and redemption procedures.
Digital bond issuance is also expanding elsewhere in Asia. Earlier this month, REC, India’s state-owned power financing company, issued 5 billion rupees, or about $59 million, of digital bonds maturing in May 2028.
