Hong Kong is poised to launch its second tokenized green bond in the coming months, with the Hong Kong Monetary Authority (HKMA) utilizing blockchain technology to improve efficiency and transparency in the redemption process, according to a report from Chinese newspaper Ming Pao. CEO Yu Weiman disclosed the plans in anticipation of “Green Finance Week” in February 2024.
This event aims to foster discussions on green financial transformation, including a global climate business forum in collaboration with the International Finance Corporation under the World Bank.
Hong Kong’s Global Green Brand Takes Center Stage During Green Finance Week
Weiman highlighted the goal of bolstering Hong Kong’s global green brand during the Green Finance Week, with various financial institutions organizing green finance activities to enhance the city’s reputation in the field.
Yu Weiman underscored the symbiotic relationship between green finance and financial technology, particularly in the issuance of the second tokenized green bond. The HKMA is actively exploring blockchain-based redemption processes to improve operational efficiency.
Additionally, the authority is investigating the integration of blockchain technology and the Internet of Things (IoT) for tokenized green bonds, allowing bondholders to gain comprehensive insights into their investments and reduce the risk of “greenwashing.”
Weiman also noted the substantial growth in Hong Kong’s green bonds and green loans, which surged to approximately US$80 billion from US$11 billion just two years ago. He expressed confidence in the continued momentum of green finance, emphasizing the potential for further expansion.
In June, Hong Kong implemented new regulations for the crypto industry, allowing retail investors to trade virtual assets. This marked a departure from previous restrictions limiting digital asset trading to professional investors and traders with at least $1 million in bankable assets.
As part of these regulations, the Securities and Futures Commission (SFC) has granted licenses to crypto exchanges, with OSL and Hashkey Group becoming the first in the city to receive such licenses. These exchanges also offer crypto-to-fiat conversion services through ZA Bank, Hong Kong’s largest online-only bank.
Notably, the crypto exchange Hong Kong VAEXC (VAEX) has recently applied for a virtual asset trading platform license with the SFC. The JPEX scandal, considered one of the largest financial frauds in Hong Kong’s history, has spurred the government to expedite the approval process for cryptocurrency products, aiming to promote compliance in the industry.