Editorial | Hong Kong breaks new fintech ground with tokenised green bond
Hong Kong is positioning itself to connect conventional finance with fintech while developing into a global hub for sustainable financing
It shows Hong Kong can sell new financial products that generate tremendous investor interest. A big attraction is that the new bonds can be settled in e-HKD or e-CNY, which are tokenised central bank currencies.
Their popularity and safety is more proof that the government and the Hong Kong Monetary Authority’s (HKMA) drive to promote fintech is bearing fruit.
The bond has four tranches, which are divided into different durations in four currencies: the HK$2.5 billion, two-year tranche for 2.5 per cent interest annually; the 2.5 billion yuan (US$351 million), five-year tranche for 1.9 per cent annually; the US$300 million, three-year tranche for 3.633 per cent; and the 300 million euro (US$348 million), four-year tranche for 2.512 per cent.
Tokenised bonds are digitalised using blockchain technology for their issuance, trading and settlement. Blockchain makes it easier and safer, as well as more cost efficient, to divide and administer the bond in different tranches.
The green bonds refer to fixed-income products or debt instruments used to finance environmentally sustainable infrastructure projects and business activities.