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The Hong Kong SAR government has priced its third batch of digital green bonds amounting to HK$10 billion ( US$1.28 billion ), reinforcing its position as an international hub for digital assets.
The issuance marks the first digital bond offering in the world that integrates tokenized central bank money in the form of e-CNY and e-HKD in the settlement process, helping further reduce settlement time, costs, and counterparty credit risk, the Hong Kong Monetary Authority ( HKMA ) says.
Denominated in HK dollar, renminbi, US dollar, and euro, the latest offering was issued under the government’s sustainable bond programme. They were priced as follows:
The bonds have retained the key innovative features of the previous issuances in 2023 and 2024, including issuing in a digitally native format, providing the option of investor access via traditional market infrastructure, and integrating green bond disclosures with the digital assets platform.
On top of that, the latest issuance has also introduced new features. For both the HKD and RMB tranches, the option to settle via tokenized central bank money was introduced alongside traditional settlement rails in the primary issuance process.
The offering achieved a record issuance size of HK$10 billion, with the total subscription amount across four currency tranches reaching over HK$130 billion, marking the largest digital bond issuance in the world to date.
Regular issuance
Paul Chan, Hong Kong’s financial secretary, notes that the “overwhelming subscription” reflects the market support for tokenized products. “The government will regularize the issuance of tokenized bond, support the establishment of comprehensive benchmarks, and promote innovative products and services for a wider application of digital finance,” he adds.
Among the new features, the tenor for the latest offering was extended to up to five years, addressing investor demand for longer-term digital bonds. Alongside an increase in the number of direct participants to the digital assets platform and arranging banks, compared to the previous issuance, the number of investors also expanded markedly. In terms of investor type, the issuance continued to attract subscriptions by a wide spectrum of institutional investors globally, covering asset managers, banks, insurance companies, private banks, and others, including a substantial number of first-time investors in digital bonds.
Digital Token Identifiers ( DTIs ), a global identification standard for digital tokens defined by the International Organization for Standardization’s ISO 24165 standard, were obtained for all tranches of the issuance. The DTIs for this issuance are directly linked to the bonds’ International Securities Identification Numbers ( ISINs ) and to the issuer’s Legal Identity Identifier ( LEI ), embedding the bonds in the wider framework of global standards.
Additionally, building on the second digital bond issuance, this issuance expanded on the adoption of the International Capital Market Association’s ( ICMA ) Bond Data Taxonomy ( BDT ), with the aim of facilitating the consistent exchange of issuance information between different transaction parties and systems in traditional capital markets and the digital industry, thereby improving interoperability and fostering end-to-end automation.
“With each issuance of the HKSAR government’s digital bonds since 2023, we have sought to further scale the market and explore new innovations, to reinforce the vision for Hong Kong to become a global hub for digital assets,” HKMA chief executive Eddie Yue says.
“The integration of tokenized central bank money in this issuance lays the foundation for future integration with other forms of digital money, fostering interoperability and unlocking new synergies across different digital infrastructures. We are also pleased to see a significant increase in market participation, with more banks and first-time digital bond investors actively participating in this issuance, a clear reflection of the progress made in scaling our digital bond market.”
Proceeds of the issuance will be used to finance and/or refinance eligible projects that provide environmental benefits and support Hong Kong’s sustainable development, in accordance with the government’s green bond framework.
Key participants
The clearing and settlement system of the digital green bonds is the Central Moneymarkets Unit ( CMU ), with HSBC Orion as the digital assets platform. HSBC, Bank of China ( Hong Kong ), Bank of Communications, BNP PARIBAS, Crédit Agricole CIB, ICBC ( Asia ), J.P. Morgan, Société Générale, Standard Chartered Bank, UBS, Allen Overy Shearman Sterling, Ashurst and Linklaters were involved in the preparation for the issuance.
BNP Paribas notes that the multi‑currency issuance has attracted strong demand from a diverse group of global institutional investors, reaffirming Hong Kong’s reputation as a global hub for both sustainable finance and fintech innovation.
As one of the joint green and sustainable bond structuring banks and joint global coordinators for the deal, BNP Paribas partnered closely with the government throughout the structuring and execution phases. The bank’s securities services business acted as a direct participant on the CM-operated distributed ledger technology platform, providing custody and settlement for the digitally native green notes.
In addition, BNP Paribas Asset Management and BNP Paribas Asset Liability Management Treasury invested in the issuance.
Crédit Agricole CIB also actively participated in the transaction. “This transaction signals another momentous stride the Hong Kong SAR government has made to leverage cutting-edge fintech to foster green and sustainable finance in Hong Kong,” says Alan Roch, head of credit and debt capital markets for Asia-Pacific at Crédit Agricole CIB. “The bank is honoured to have assumed a lead role in this transaction in origination, syndication, green and sustainable structuring. We look forward to supporting the government's ongoing initiative in the future.”
Vigeo Eiris has provided a second-party opinion on the framework. The bonds have also received a green and sustainable finance certificate from the Hong Kong Quality Assurance Agency.
