Hong Kong is set to issue its third series of government-backed digital green bonds, utilizing HSBC’s blockchain infrastructure to fund environmental and climate-focused initiatives. This new offering continues the city’s strategy of integrating digital assets into its financial framework.

The bonds, which have received a strong AA+ rating from S&P, will be available in multiple currencies, including U.S. dollars, euros, offshore yuan, and Hong Kong dollars. The entire lifecycle of these bonds—from issuance and recording to settlement—will take place on-chain, eliminating the need for traditional clearing systems. The design also includes a fail-safe mechanism, allowing the bonds to transition back to conventional financial systems if necessary.

A Growing Hub for Tokenized Assets

This marks Hong Kong’s third digital bond sale since 2023, reflecting a consistent push into tokenized finance. The private sector has also embraced this trend, with corporations raising a combined $1 billion to date through at least six blockchain-based bond offerings. Recent participants in this space include Shenzhen Futian Investment Holdings and Shandong Hi-Speed Holdings Group.

The growth is supported by proactive government measures. In 2023, the Hong Kong Monetary Authority launched the Digital Bond Grant Scheme, a program designed to subsidize up to 50% of the eligible costs for companies that issue tokenized bonds. This initiative signals a clear commitment to fostering a robust ecosystem for digital assets and green finance.