In mid-November, the Hong Kong government priced an approximately HK$10 billion ($1.3 billion) tokenized green bond offering. It is the first global government issuance to permit settlement via digital fiat currencies and one of the largest digital bonds issued globally.
The Hong Kong Monetary Authority, the territory’s de facto central bank and bank regulator, issued the bond in four tranches across several currencies. The Hong Kong dollar and yuan tranches can be settled using e-HKD and e-CNY, digital versions of those currencies based on blockchain technology, alongside traditional settlement methods.
Sovereign tokenized bonds indicate financial centers no longer compete on just cost or liquidity, “they are now competing on infrastructure,” says Dor Eligula, co-founder of BridgeWise. “Hong Kong’s move accelerates a shift toward markets where data is auditable in real-time, and settlement becomes a feature rather than a friction. That ultimately reshapes the global hierarchy of capital markets.”
“Riding on our established strengths in financial services, this issuance will further consolidate Hong Kong’s status as a leading green and sustainable finance hub,” said Christopher Hui Ching-yu, secretary for financial services and the treasury, in the November 11 announcement.
Specifically, investors purchasing the HK$2.5 billion, two-year tranche would receive 2.5% in annual interest for two years. The 2.5 billion yuan ($351 million), five-year tranche yielding 1.9% annually, with the $300 million, three-year tranche returning 3.6%, and the €300 million ($348 million) four-year tranche paying 2.5% annually.
The offering drew total demand of more than HK$130 billion, with subscriptions from a range of international institutional investors, including multinational banks, investment banks, insurers, and asset management firms, according to an HKMA prepared statement.
The current bond offering will finance and refinance projects under the government’s Green Bond Framework. The government issued two batches of tokenized green bonds—an HK$800 million batch in February 2023 and another worth around HK$6 billion in February 2024.
The latest issuance extends the tenor up to five years. Compared with previous issuances, the number of investors has also “expanded markedly,” according to the HKMA.