Hong Kong to sell digital green bonds in multiple currencies

Hong Kong is preparing to sell new digital green bonds in US dollars, Hong Kong dollars, euros, and offshore yuan, according to sources familiar with the matter.

The government could price the deal as early as November 11, marking its third digital bond sale since 2023.

Digital bonds use blockchain technology for issuance and settlement and can operate on platforms from banks such as HSBC or Goldman Sachs, or on public blockchains like Ethereum.

The new notes would be recorded and cleared using a distributed ledger platform from HSBC.

S&P assigned the proposed bonds an AA+ rating, and Rain Yin, a director at S&P, said risks are mitigated by a plan to shift the notes to traditional systems in case of disruption.

Since 2023, at least six digital notes issued by corporates in Hong Kong have raised a total of US$1 billion, according to Bloomberg, with four offerings completed this year.

Recent issuers include Shenzhen Futian Investment Holdings and Shandong Hi-Speed Holdings Group, both backed by the Chinese state.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Hong Kong tokenised bond metrics stay opaque

Hong Kong issued US$870 million in tokenised green bonds in 2023 and 2024, with on-chain settlement and documentation 1. The sources share no figures on timing, cost, or investor uptake 1.
No data on orderbook coverage, investor mix, or process gains 1. HSBC Orion settles in fiat without cryptocurrencies or stablecoins, which mirrors traditional flows on DLT 2.
S&P Global Ratings gave AA+, and the deal kept a contingency to switch back to traditional rails 2.

Multi-currency bonds spur middleware demand

New digital bonds cover US dollars and Hong Kong dollars 2. They also include euros with offshore yuan, recorded and cleared on HSBC Orion 2. Issuances can run on Goldman Sachs GS DAP (the bank’s tokenisation platform) or public blockchains 1.
About 40% of market participants use Distributed Ledger Technology (DLT) or digital assets 2. Fragmented links across public and private chains drive demand for Canton Network (a privacy-enabled network for connecting permissioned financial blockchains) and Chainlink’s Cross-Chain Interoperability Protocol (a cross-chain messaging and token-transfer standard) 1.
Fintech vendors and infrastructure providers with pre-built Application Programming Interface (API) links, standard data feeds, or one interface across HSBC Orion 2 and Deutsche Börse D7 (the exchange group’s digital securities issuance and custody platform) 1 can earn fees in a digital assets market that may reach $16 trillion 2. Add International Central Securities Depository (ICSD) routes to Euroclear and Clearstream (the two largest ICSDs in Europe) 2.