BIS, HKMA Explores Use of Tokenised Green Bonds in Sustainable Investment Push

BIS, HKMA Explores Use of Tokenised Green Bonds in Sustainable Investment Push

by August 25, 2021
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  

The Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre and the Hong Kong Monetary Authority (HKMA) will be working on a prototype digital infrastructure Project Genesis to improve sustainable investing with tokenised green bond assets.

As BIS Innovation Hub’s first green finance project, Genesis will explore the tokenisation of green bonds enabling investment in small denominations, combined with real-time tracking of environmental outputs.

BIS said in a statement that green finance has been a key priority for its innovation hub and Project Genesis is an integral part of that.




Genesis will be developed together with six partner companies that will design the digital infrastructure.

Targeting the full bond lifecycle, Switzerland’s Digital Asset and their partner GFT Technologies Hong Kong will deploy multiple permissioned blockchains.

Concurrently, the Liberty Consortium, consisting of SC Ventures, Standard Chartered Bank and Shareable Asset, will be leveraging a public permissionless blockchain infrastructure.

Allinfra, a Hong Kong SAR startup, will provide technology verified data that can track in real-time the positive environmental impact of projects.

After starting with design thinking workshops, the development teams are now working in iterative sprints to build the prototypes, collaborating with key stakeholders in the Hong Kong financial ecosystem.

The results of the tests and prototypes will be published in the fourth quarter of 2021.

Hong Kong’s green fintech sector, while still nascent, is poised to take off on the back of HKMA’s guidelines on the Green and Sustainable Finance Grant Scheme. The growth of sustainable finance is touted as the next frontier in the fintech ecosystem.

Edmond Lau, Deputy Chief Executive of the HKMA BIS green bonds

Edmond Lau

“The HKMA welcomes the collaboration with BIS Innovation Hub on this novel experimentation on the symbiosis of sustainability and tech.

 

Technologies such as blockchain and smart contracts, combined with the internet-of-things, could streamline the bond issuance process, improve efficiency in distribution and facilitate reporting on the use and environmental impact of green bonds proceeds, thus enhancing transparency to green bond investors.”

said Edmond Lau, Deputy Chief Executive of the HKMA.

Bénédicte Nolens, Head of the BIS Innovation Hub Hong Kong Center. BIS green bonds

Bénédicte Nolens

“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.”

said Bénédicte Nolens, Head of the BIS Innovation Hub Hong Kong Center.

  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •