HONG KONG: Jurisdiction to develop tokenised green bonds.

As published on capital.com, Tuesday 24 August, 2021.

The Bank of International Settlements (BIS) and the Hong Kong Monetary Authority (HKMA) have teamed up with experts from the technology industry to advance green investments and other sustainability projects.

The plan is to explore whether it’s possible to develop the tokenisation of green bonds, which will enable investment in small denominations and real-time tracking of environmental benefits.

The aim is to produce a solution that meets regional and global environmental and sustainability goals.

Project Genesis will draw on BIS Innovation Hub Hong Kong Centre and HKMA expertise to provide the financial knowhow on environmental investments.

Tech specialists GFT Technologies Hong Kong and Digital Assets (Switzerland) will focus on developing a prototype digital infrastructure for the investment platform that is as transparent as possible.

Alongside, the Liberty Consortium, comprising SC Ventures, Standard Chartered Bank and Shareable Asset, will be developing a public permissionless blockchain infrastructure, which GFT Technologies HK and Digital Assets will be charged with implementing.

Project Genesis intends to arrive at a solution whereby tokenisation of green bonds will enable more fluid transactions. Aside from streamlining the trading process, the team sees transparency as key to its success. Investors must be confident that the bond issuer is delivering the desired environmentally-friendly output.

Commenting on Project Genesis, head of the BIS Innovation Hub Benoît Cœuré said: “Green and digital are not only interconnected but interdependent – the fate of one depends on the other. Green finance, accordingly, is a key priority of the BIS Innovation Hub and Genesis is an integral part of that.”

Bénédicte Nolens, head of the BIS Innovation Hub Hong Kong Centre, added: “Our vision is that you can download an app to your phone, and invest any amount into safe government bonds, which will develop a green project – let’s say a solar or wind farm.

“Over the bond’s lifetime, you would be able to not just see accrued interest, but also track in real time how much clean energy is being generated, and the consequent reduction in CO2 emissions linked to your individual investment. Further, you could sell the bonds in a transparent market.”

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