Hong Kong issues tokenized green bonds, will allow citizens to trade crypto on June 1

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(Kitco News) – The Government of Hong Kong has announced the successful issuance of a tokenized green bond valued at 800 million Hong Kong dollars ($101 million), which was made possible by the Government Green Bond Program (GGBP).

The green bond was announced on Thursday, and the issuance makes the government of the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR government) the first global government body to issue a green bond.

To help launch the bond, the government used a four-bank syndicate – two of which also act as investor managers – to distribute the bond, while the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA) will act as the clearing and settlement system for the bond by leveraging Goldman Sachs’ tokenization platform – GS DAP.

The one-year tokenized green bond yields 4.05%, and “The processes of the bond lifecycle, including coupon payment, secondary trade settlement and maturity redemption, will also be digitized and performed on the private blockchain network,” the press release. release said. “The on-chain records on the private blockchain network will be the legally definitive and final records of ownership of the security tokens and cash tokens for the parties on the platform.”

This development has been years in the making as the HKMA has been investigating the issuance of green bonds since at least 2021. Green bonds serve to finance environmentally friendly projects, and tokenization allows the bonds to be sold digitally with ease.

“Distributed ledger technology (DLT) holds the promise of revolutionizing the operation of financial markets,” said Eddie Yue, CEO of the HKMA. “The Tokenised Green Bond issue with on-chain DvP settlement using cash issued by the HKMA is an important step forward in promoting the adoption and realization of the full potential of DLT in the bond market. Based on the experience gained from this issue, the HKMA and government to work with other stakeholders to conduct additional tokenized issuances to push the limit and encourage adoption.”

Hong Kong citizens will soon be allowed to trade crypto

Hong Kong’s plan to allow citizens to trade crypto could soon become a reality according to Twitter user NoodleofBinance, who tweeted on Wednesday that starting June 1, Hong Kong will officially make the buying, selling and trading of cryptos fully legal for all residents.

“Expect a huge influx of big money from the East,” NoodleofBinance said, adding, “Asian currency based stablecoin coming out of HK will also be a security.”

Under current rules, crypto trading in Hong Kong is restricted to professional investors, who are defined as individuals with a portfolio of at least HK$8 million (US$1.02 million).

In a follow-up chirpingsaid the crypto advocate that “Stablecoin in US dollars will no longer be the only [token] in town. I envision us trading more stablecoin currency pairs and there will be tons of arbitrage opportunities,” similar to what was seen in the 2017 stock market when the BTC/CNY pair was still prevalent and allowed people to profit” fortunes by arbitrating the Yuan pair and US dollar pair.”

Adding extra credibility to this announcement, Coinbase CEO Brian Armstrong responded to the NoodleofBinance tweets warning that the US risks falling behind in the blockchain race due to the lack of clear regulations and inability to pass meaningful legislation.

“America risks losing its status as a financial hub in the long term, with no clear rules for crypto, and a hostile environment from regulators,” Armstrong so. “Congress should act soon to pass clear legislation. Crypto is open to everyone in the world and others are leading the way. EU, UK and now HK.”

The ability for Hong Kong citizens to access crypto trading has been in the works for months, ever since the government first announced it was exploring the topic in October. DBS Group, the largest bank in Singapore, revealed on Monday that it plans to apply for a license that would allow it to offer crypto services to Hong Kong residents as part of the Chinese territory’s push to become a digital asset hub.