EvergreenHub: Navigating Bond Tokenisation

Digital Bond Knowledge Repository

• Concept tested the issuance of tokenised green bond in Hong Kong, in collaboration with the Bank for International Settlements Innovation Hub Hong Kong Centre
• Laid solid foundation for subsequent real capital markets transactions

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Project Genesis: A Vision for Technology-driven Green Finance

Prototype report Prototype walk-through video can be viewed here

Prototype report Prototype walk-through video can be viewed here

Key highlights:

• Proved the compatibility of Hong Kong’s legal and regulatory framework in supporting innovative forms of bond issuance
• Completed the full set of bond lifecycle events using DLT, from primary issuance to secondary trading settlement, coupon payment and maturity redemption
• Shortened the settlement cycle for primary issuance from the typical T+5 to T+1

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Key highlights:

• Matched the benchmark sizes of many conventional issuances with an aggregate issuance size at around HK$6 billion equivalent in four major currencies (HKD, RMB, USD, EUR)
• Attracted subscription from a wide spectrum of global investors, ranging from asset managers, banks, insurance companies, private banks, to non-financial institutions
• Streamlined issuance process, adopted machine-readable language and enhanced on-chain accessibility to green bond information

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Key highlights:

• Achieved record issuance size of over HK$10 billion across four currency tranches (HKD, RMB, USD, EUR), marking the world’s largest digital bond at the time
• Scaled market participation, with total subscription amount exceeding HK$130 billion, and significantly increasing the number of first-time digital bond investors
• Extended tenor to up to five years, addressing investor demand for longer-term digital bonds
• For the HKD and RMB tranches, the option to settle via tokenised central bank money was introduced, which helped further reduce settlement time, costs and counterparty credit risk

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To fully unlock the potential of tokenisation, the HKMA will continue to promote adoption of the technology in capital markets, and explore further innovation with partners.

Building on the success of the three tokenised government green bond issuances, the HKMA is facilitating the wider adoption of tokenisation technology in the bond market through various efforts:

• Providing the market with consistent supply of tokenised government bonds
• Promoting interoperability across financial infrastructures
• Exploring policy measures, market practices, and innovations collectively with the industry through the Tokenised Bond Expert Group
• Exploring enhancements to the legal framework for further adoption of distributed ledger technology (DLT) in Hong Kong's fixed income market with the Financial Services and the Treasury Bureau
• Promoting tokenised bond issuances in Hong Kong through the Digital Bond Grant Scheme
• Providing reference materials to market participants via EvergreenHub