Hong Kong Plans Up to $2.6 Billion Digital Green Bond Sale, Set to Be World’s Largest

Hong Kong’s government is preparing to sell as much as $2.6 billion of digital green bonds, stepping up its push to expand the blockchain-based bond market.

Bloomberg reported on Sept. 24 that the government is preparing a digital green bond offering worth HK$15 billion to HK$20 billion, or about $1.9 billion to $2.6 billion. If completed as planned, it would be the world’s largest digital bond issuance.

The bonds are expected to be issued in four currencies: the U.S. dollar, the Hong Kong dollar, the euro and offshore yuan. The government is holding investor meetings with financial institutions this week, and pricing could be set as early as next Monday.

Digital bonds use blockchain technology to manage issuance, trading and settlement. Hong Kong aims to combine green finance with asset tokenization to energize the bond market and reinforce its position as a major bond-trading hub in Asia.

Hong Kong issued about HK$10 billion of digital bonds last year. In June, Hong Kong Mortgage Corp. issued HK$12 billion of digital bonds, setting a world record at the time. If this latest sale goes ahead, it would break that record.

According to the Hong Kong government, digital bonds issued in the city accounted for about 50% of the global market from last year through the first half of this year. Chief Executive John Lee has said the government plans to make digital bond issuance a regular practice while also promoting payments using digital currencies and blockchain-based interest payment and redemption processes.

Digital bond issuance is expanding elsewhere in Asia as well. Earlier this month, REC, India’s state-owned power financing company, issued 5 billion rupees, or about $59 million, of digital bonds due in May 2028.