The Hong Kong Monetary Authority (HKMA) previously said it was working on its second digital green bond issuance. Earlier this month we reported the next iteration will involve the same syndicate of banks as last time, Bank of China (Hong Kong), Credit Agricole CIB, Goldman Sachs and HSBC. Today Bloomberg said that UBS will also participate.
The five banks are part of a working group that will explore issuing a multi series fixed rate set of digital bonds.
At least four of the five banks have their own DLT platforms that can be used to record the issuance of tokenized securities. The HKMA used Goldman Sachs’ GS DAP for the first digital green bond. According to Bloomberg citing un-named sources, the HSBC Orion blockchain platform has been chosen for the second one.
The first bond issuance was for HK$ 800 million and the HKMA subsequently published a review of the project. It confirmed the potential for DLT to “enhance efficiency, liquidity and transparency in bond markets.” But it also emphasized the need for interoperability between the different DLT systems and conventional systems to avoid fragmentation.
Meanwhile, in the last few months, several institutions have been involved in digital green bond issuances. The most recent was Hitachi which issued a $69 million green bond earlier this month. Also this month, Societe Generale issued a small €10 million green bond which was bought by AXA IM and Generali Investments. In September, ABN Amro facilitated a €5 million issuance for real estate firm Vestada bought by Germany’s Dekabank.
