Hong Kong is preparing the third issuance of tokenized green bonds, with tranches in US dollars, Hong Kong dollars, euros and offshore yuan. The price could be set as soon as 11 November 2025, following the precedent of issuances of HK$800 million in Feb‑2023 and HK$6,000 million in Feb‑2024, according to sources familiar with the matter. The initiative aims to boost tokenization of the sovereign debt market and attract international liquidity, affecting institutional investors, custodians and settlement platforms.
The Hong Kong Treasury is marketing a new batch of “natively digital” bonds as part of its Fintech 2030 strategy and the Digital Asset Development Policy Declaration 2.0. The program contemplates several maturities and coupons referenced to market conditions, aligning issuance design with existing market benchmarks.
The proposed structure spans multiple tenors and currencies: a USD tranche at 2 years (T3+3), a EUR tranche at 4 years (MS+23), a CNH tranche at 5 years with a 1.90% coupon and an HKD tranche at 2 years with a 2.50% coupon, according to available information. Fitch has assigned a ‘AA’ rating and S&P ‘AA+’ to the package, anchoring the offering within high-grade sovereign risk.
Previous issuances used DLT platforms such as GS DAP and HSBC Orion; for the third round, HSBC Orion is expected to manage records and clearing for certain tranches, with the possibility of wholesale CBDC settlement for the RMB and HKD legs. The HKMA supports the effort with programs including a Digital Bond Grant Scheme that subsidizes up to HK$2.5 million per eligible issuance.
Tokenization is the conversion of a traditional asset into a transferable digital representation on a blockchain, enabling on-chain lifecycle events while interfacing with conventional market infrastructure.
Implications and next steps for Hong Kong
The multi-currency nature and interoperability with Euroclear/Clearstream expand the universe of investors and facilitate the entry and exit of flows across jurisdictions. Ratings agencies emphasize plans to revert to traditional systems in case of DLT failure, mitigating execution risk and ensuring continuity of settlement.
The initiative is embedded in a broader framework that includes the Stablecoins Bill and measures for VATPs, which could accelerate regulatory clarity and institutional participation. With potential tax incentives (stamp duty exemptions for tokenized ETFs) and public subsidies reduce barriers to entry for issuers and distributors, encouraging market-scale experimentation.
Next verified milestone is pricing, potentially on 11 November 2025; its execution will determine the pace of practical adoption of tokenized sovereign bonds and will mark an operational benchmark for issuers, custodians and compliance teams.
