Today, the Hong Kong Monetary Authority (HKMA) confirmed its first HK$800 million ($102 million) tokenized green bond issuance. The one-year bond was priced at 4.05% and distributed by a syndicate of four banks, Bank of China (HK), Credit Agricole CIB, HSBC and Goldman Sachs.

As we reported earlier this week, the bond used Goldman Sachs’ digital asset platform (GS DAP), which runs on a permissioned blockchain. Goldman previously participated in tests of HKMA green bonds. A tokenized issue of the European Investment Bank also used GS DAP.

The HKMA’s Central Money Markets Unit (CMU) handled clearing and settlement, with a tokenized HKD used for settlement on a T+1 basis. The tokenized cash is a claim against the HKMA. All future settlement and lifecycle events will use the blockchain, which acts as the legal registry of ownership.

“Our Policy Statement on Virtual Asset Development in Hong Kong, issued in October last year, states that we actively embrace Web3-related financial innovations and promote steady and prudent market development,” said Paul Chain, Financial Secretary. “The successful issuance of this tokenized green bond marks an important milestone as it demonstrates Hong Kong’s strengths in blending the bond market, green and sustainable finance, and fintech.”

Eddie Yue, CEO of HKMA, added that the government plans to work with others to make more tokenized issues that “push the limit.”

The custodians of the notes are Bank of China (HK) and HSBC, with HSBC acting as trustee, transfer agent and issuing agent.

Additional details were covered in a previous article.