Hong Kong plans to issue the third digital bond.

The Hong Kong SAR government is actively preparing for the third issuance of sovereign digital bonds, marking its ongoing advancement in the Blockchain financial sector. According to informed sources, Hong Kong has designated a group of banks to design this transaction, although the scale of issuance and specific timing have yet to be determined. This move not only continues Hong Kong's exploration in the tokenization of bonds but also demonstrates its ambition to build a global digital financial center.

The Hong Kong digital bond market is developing steadily.

The digital bond market in Hong Kong has developed rapidly in recent years. In February 2023, Hong Kong successfully issued its first tokenized green bond, which received enthusiastic welcome from institutional investors. A year later, Hong Kong further launched multi-currency digital bonds, consolidating the potential of blockchain technology in the traditional debt market. The successful issuance of these two bonds has laid a solid foundation for the upcoming third sovereign digital bond.

Recently, state-owned enterprises Shenzhen Futian Investment Holdings Co., Ltd. and Shandong High-Speed Holdings Group issued digital bonds in Hong Kong, further enhancing market momentum. Their participation not only boosts the industry credibility of digital bonds but also indicates that companies' demand for this new financing channel is expanding from pilot projects to broader applications. According to statistics, Hong Kong has raised approximately $1 billion through digital bonds this year, with 70% set to be issued in 2025, demonstrating strong momentum for market growth.

Blockchain technology empowers the bond market

Digital bonds are traditional debt securities issued and traded based on Blockchain technology, priced in conventional currencies such as USD, HKD, or RMB. Although they have a novel form, investors are not unfamiliar with them, and the main buyers are still institutional investors from the traditional bond market. HSBC's distributed ledger platform Orion HK has supported the issuance of over $1.7 billion in tokenized bonds by governments, banks, and enterprises, covering sovereign, financial, and corporate transactions. Whether on private platforms like Orion HK or public blockchains like Ethereum, they provide the technical support for the issuance of digital bonds.

The application of Blockchain technology has brought significant advantages to the bond market, including faster settlement speeds, lower issuance costs, and higher transparency. Hong Kong officials emphasize that the digital bond market is a "forward-looking" financial innovation that can surpass traditional paper bond issuance models. John O'Neill, head of digital assets at HSBC, stated that corporate and investor interest in tokenized bonds is growing, while top law firm King & Wood Mallesons also noted that client attention in this area continues to rise.

Policy Support and Regional Competition

To further stimulate the digital bond market, the Hong Kong SAR government has introduced financial incentives, with each eligible bond issuance able to receive a maximum subsidy of HKD 2.5 million (approximately USD 320,500). These measures aim to promote the issuance of digital bonds in both the public and private sectors, consolidating Hong Kong's position as a regional digital finance hub.

Against the backdrop of rapid changes in the global financial system, Hong Kong's digital bond program is not only a technological innovation but also a matter of international competition. The demand for digital assets in Asia continues to rise, especially under the trend of countries like the United States implementing supportive policies for cryptocurrencies. Hong Kong hopes to promote the digital bond market to align with global trends and strengthen its position as a leading international financial center.

Hong Kong's third issuance plan for sovereign digital bonds not only reflects its confidence in blockchain technology but also demonstrates investors' strong interest in this emerging market. As corporate participation and market scale continue to expand, Hong Kong's digital bond market is moving from a pilot phase to broader application. In the future, with the joint promotion of policy support, technological innovation, and market demand, Hong Kong is expected to occupy a more important position in the global digital finance sector, injecting new vitality into traditional financial markets.