Hong Kong offers third round of ‘digitally native’ bonds in FinTech hub push

The Hong Kong government is preparing its third offering of “digitally native” green bonds denominated in four currencies for global participation. 

Hong Kong intends to further its ambitions of becoming a global financial hub by issuing green bonds using blockchain or DLT technology. 

Digital bonds in Hong Kong

According to multiple reports, the Hong Kong government is marketing its third batch of “digitally native” green bonds. These bonds are debt instruments issued, traded, and settled via blockchain or DLT platforms. 

They are called green bonds because the proceeds are either directed or at least labeled for environmentally‑friendly or climate‑related projects. That label is part of the appeal for investors in the environmental, social, and governance (ESG) sectors.. 

These bonds will be available in USD, HKD, EUR and offshore CNY. The pricing of the bonds could be finalized as early as Monday, according to sources. 

Prior to this, Hong Kong had already issued at least two digital bond deals since 2023. The DLT platform, which will handle the issuance, trading, and settling of these bonds, will be provided by HSBC Holdings Plc. 

The rise of tokenized assets 

Hong Kong appears to be positioning itself to take advantage of the growing interest in tokenized assets. The city already has a strong traditional international bond issuance base, which accounts for about 30% of Asian international bond issuances. Tokenized assets such as securities, stablecoins, and crypto‑infrastructure can then leverage this foundation and expertise. 

Blockchain or DLT‑based bond issuance can offer faster settlement, higher transparency and potentially lower cost, compared to traditional bonds and the issuance of multi-currency bonds allows global investors to participate, supporting Hong Kong’s ambition of becoming a financial hub.

For the initiative to succeed, Hong Kong will need to develop a clear legal and regulatory framework for tokenized bonds. The existing systems are designed for only traditional bonds and raise concerns for investors. 

Hong Kong also needs to appeal to investors over competitors from other jurisdictions like Singapore and Dubai. 

At least six digital‑bond issuances by corporates in Hong Kong have raised around $1 billion, with four of them achieving the milestone this year. Among the issuers are state‑backed Chinese firms like Shenzhen Futian Investment Holdings and Shandong Hi‑Speed Holdings Group.