Hong Kong Gears Up for Global Green Finance Week & Innovative Tokenized Bonds

The Hong Kong Monetary Authority (HKMA) Chief Executive, Yu Weiman, announced the upcoming collaboration with the government to organize the “Green Finance Week” scheduled for February next year. According to the report, the focal point of this initiative is the coordination of a global climate business forum in partnership with the International Finance Corporation, an entity under the World Bank.

Hong Kong’s Green Finance Leap

Experts gather in this forum to discuss the transformation of finance. The forum will also have a roundtable discussion, bringing the International Monetary Fund (IMF) to the table on strategies for finance. Following are finance-related activities several financial institutions have planned to help promote Hong Kong’s reputation in this area.

Yu Weiman revealed intentions of issuing a tokenized bond at HKMA, which is expected to be launched in the coming months. About finance and financial technology, he stressed pointing researching at HKMA around integrating blockchain technology into the process of redemption and improving efficiency.

Moreover, the Hong Kong Monetary Authority (HKMA) also explores technology and the Internet of Things (IoT) for tokenizing bonds. Through this initiative, the main objective is to give the bondholders knowledge of which projects they are investing in and insights into the project, including information about the development progress of the project and the environmental quality. The aim is to minimize the risk of misleading through claims.

During a discussion, Yu Weiman highlighted the growth observed in Hong Kong’s bonds and green loans market. Observations explain that the market growth has been nearly US$80 billion within just two years from a nearly sevenfold growth of almost US$11 billion, equivalent to about HK$625.2 billion. Yu Weiman was bullish on this momentum. It also identified further potential for girth within the realm of green finance.

Societe Generale’s Ethereum Green Bond

In a related development, Societe Generale marked a milestone on November 30, 2023, by issuing its inaugural digital green bond as a Security Token directly registered by SG-FORGE on the Ethereum public blockchain. This move, aimed at increasing transparency and traceability of ESG data, saw the security tokens fully subscribed by leading institutional investors AXA Investment Managers and Generali Investments through a private placement.

However, the digital green bond, structured as a EUR 10 million senior preferred unsecured bond with a 3-year maturity, leverages blockchain technology for enhanced transparency, traceability, and transaction speed.

Societe Generale’s Sustainable and Positive Impact Bond framework defines Eligible Green Activities, and the net proceeds from this bond will exclusively finance or refinance these activities. This showcases the bank’s commitment to environmentally sustainable investments. Societe Generale has consistently issued Positive Impact Bonds since its inaugural issuance in 2015.

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