This photo taken on Aug 22, 2023 shows the Hong Kong Stock Exchange in Central, Hong Kong. (EDMOND TANG / CHINA DAILY)

The Hong Kong Special Administrative Region launched the world’s first multi-currency digital green bond worth HK$6 billion ($767 million) on Wednesday, as part of efforts to boost its status as an international fintech hub.  

The two-year digital green bonds, which were offered in Hong Kong dollars, renminbi, US dollars and euros under the Government Green Bond Programme, consist of HK$2 billion, 1.5billion yuan, $200 million and 80 million euro tranches with coupons of 3.8 percent, 2.9 percent, 4.749 percent and 3.647 percent, respectively. 

The launch marks the second digital bond issuance following the HKSAR government’s inaugural tokenized green bond issued in February last year, a sale that generated about HK$800 million to fund environmentally-friendly projects.

Chief Executive of Hong Kong Monetary Authority Eddie Yue Wai-man said the second digital issuance includes multiple innovations that broaden investor access, support interoperability, and improve transparency and efficiency

The government’s issuance of the latest digital green bonds “demonstrates Hong Kong's strengths and leadership position in combining the bond market, green and sustainable finance, as well as fintech,” Financial Secretary Paul Chan Mo-po said.

“We will continue to promote innovation and application of fintech, explore the use of new technologies to enhance the efficiency, transparency, and security of financial transactions, and foster vibrant development in various financial market sectors.”

ALSO READ: CNY: More cross-boundary bus services for Shenzhen Bay

Secretary for Financial Services and the Treasury Christopher Hui Ching-yu struck an upbeat note, saying that this issuance will deepen social awareness of sustainable development in combination with fintech integration and consolidate Hong Kong’s position as a leading hub for green and sustainable finance.

Chief Executive of Hong Kong Monetary Authority Eddie Yue Wai-man said the second digital issuance includes multiple innovations that broaden investor access, support interoperability, and improve transparency and efficiency. “We hope this issuance would promote the development of the digital securities market and encourage the wider adoption of digitalization technology,” he said.

Financial players hailed the bonds’ launch, saying the move marks a milestone in Hong Kong’s fintech development and boosts the city’s status as an international financial center.

“Digital bonds offer enormous potential for innovation in the financial sector. This transaction provides UBS and its clients with a huge opportunity in a rapidly growing product space both now and in the future,” said Amy Lo, chairman of global wealth management Asia and head and chief executive of UBS Hong Kong.

ALSO READ: AAHK retail bonds seen as reference for financing projects

Chief Executive of the International Capital Market Association Bryan Pascoe noted that the offering in alignment with ICMA’s Bond Data Taxonomy marks a significant milestone to foster interoperability and facilitate scalability of the distributed ledger technology-based bond markets.  

“It is also further testament to the HKSAR government’s position as a leader in capital markets development,” Pascoe added. 

Global law firm Linklaters said the bonds are issued in digitally native format, without the need to first issue in a conventional clearing system and subsequently convert into digital format, making it the first digitally native bond issuance in Hong Kong.

tianyuanzhang@chinadailyhk.com