Hong Kong has introduced a new range of multi-currency digital bonds. These bonds will be issued in US dollars, Hong Kong dollars, euros, and offshore yuan.
This is the third effort by Hong Kong in the digital market of multi-currency bonds. The bonds will serve to draw international investors and to further enter the city into digital finance.
According to sources up-to-date with the deal, the bonds could be priced as early as Monday. According to Bloomberg, these digital bonds will be provided on blockchain, ensuring safe and transparent management.
Digital bonds are a type of security that is offered on a blockchain. The bond’s information and ownership are registered in an online registry through the technology, enabling transparency.
Hong Kong’s dominance in the Asian bond market
The bonds can be issued on public blockchains like Ethereum or through platforms offered by financial giant firms like HSBC and Goldman Sachs. This provides investors with several ways of engaging in the digital bond market.
The shift to a tokenized bond framework was successful, and Hong Kong followed afterward in 2024. In 2023, the Hong Kong Monetary Authority (HKMA) issued the second tokenized green bond, which tends to take advantage of blockchain to initiate redemption procedures.
Hong Kong has established itself as the leading bond issuance center in Asia in the larger market. The city has dominated the regional bond market for nine years with the contribution of close to 30% of international bond issuances in Asia.
The digital green bonds follow the introduction of Hong Kong’s first tokenized money-market fund by Franklin Templeton. This fund is based on blockchain to be more transparent and efficient, and it will be available first to institutional investors.
S&P Global Ratings awards AA+ to new digital bonds
Digital finance has also been adopted by Hong Kong-based corporations. According to Bloomberg, these companies have issued at least six digital notes, raising a total of $1 billion, with four of these deals occurring this year.
S&P Global Ratings has rated the new digital bonds at an AA+ rating. Rain Yin, the Director of S&P, reported that the bonds were secured with an emergency plan to switch to traditional systems in case of any setback.
The recent initiative by Hong Kong demonstrates its increased role in the digital finance arena. The city is still trying to establish itself as one of the pioneers in the new digital asset market.