The Hong Kong Monetary Authority formed an expert group to support tokenized bond development, including JPMorgan Securities, HSBC, Standard Chartered Bank, UBS, Ant Digital, and HashKey Group. The group held its first discussions in May, focusing on legal and regulatory frameworks for tokenized bond issuance and trading. The initiative builds on Hong Kong's earlier tokenized bond projects, including a February 2023 HK$800 million green bond issuance and a 2024 HK$6 billion multi-currency digital green bond offering, which was the largest digital bond issuance on record at the time and the first to integrate both e-CNY and e-HKD.
HKMA Tests Tokenized Bonds From 2021 to 2024
Hong Kong has been working on bond tokenization for several years. In 2021, the HKMA partnered with the Bank for International Settlements to study the tokenization of bonds. In February 2023, the Hong Kong government issued HK$800 million, or about $102 million, of tokenized green bonds. It followed that in 2024 with a HK$6 billion, or about $766 million, multi-currency digital green bond offering denominated in Hong Kong dollars, Chinese yuan, US dollars, and euros. The 2024 transaction was presented as the largest digital bond issuance on record at the time and the first to integrate both the e-CNY and e-HKD.
JPMorgan, HSBC, UBS and Digital Asset Firms Join Expert Group
The expert group includes JPMorgan Securities, HSBC, Standard Chartered Bank, UBS, Ant Digital, and HashKey Group. Its mandate is to examine policy measures, market practices, and technical innovations that could support wider adoption and scalability in tokenized bond markets. The inclusion of large banks gives the group practical weight in issuance, distribution, custody, compliance, and secondary market operations. Digital asset firms add infrastructure, tokenization design, wallet and custody models, and blockchain-specific operational experience. HashKey Group chairman and CEO Xiao Feng said scaling tokenized bonds is not only a technology issue. "Scaling up the commercial adoption of tokenized bonds is not merely a matter of technology implementation, but a systematic undertaking that requires the coordination of legal and regulatory frameworks, underlying infrastructure and the broader industry ecosystem," he said.
US, South Korea and Japan Launch Parallel Tokenized Bond Initiatives
In the US, the Depository Trust & Clearing Corporation has launched a limited pilot to place representations of US Treasury securities held by its depository subsidiary on blockchains. In South Korea, Ripple has partnered with Kyobo Life Insurance to enable tokenized government bond transactions. In Japan, Japan Securities Clearing Corporation launched a trial in April with Mizuho, Nomura, and Digital Asset to test blockchain-based collateral using Japanese government bonds.
Expert Group Focuses on Legal and Regulatory Framework in May Meeting
The expert group held its first discussions in May, with early work focused on Hong Kong's legal and regulatory regime and how it applies to the issuance and trading of tokenized bonds. That focus suggests the next bottleneck is not whether tokenized bonds can be issued, but how legal certainty, investor rights, settlement finality, secondary trading, and custody will work across the full transaction cycle.
FAQ
What did the Hong Kong Monetary Authority do to support tokenized bonds?
The Hong Kong Monetary Authority formed an expert group including JPMorgan Securities, HSBC, Standard Chartered Bank, UBS, Ant Digital, and HashKey Group to examine policy measures, market practices, and technical innovations for tokenized bond markets. The group held its first discussions in May, focusing on legal and regulatory frameworks.
What tokenized bond issuances has Hong Kong completed?
In February 2023, the Hong Kong government issued HK$800 million, or about $102 million, of tokenized green bonds. In 2024, it issued a HK$6 billion, or about $766 million, multi-currency digital green bond offering denominated in Hong Kong dollars, Chinese yuan, US dollars, and euros, which was the largest digital bond issuance on record at the time and the first to integrate both e-CNY and e-HKD.
How are other markets testing tokenized bonds?
In the US, the Depository Trust & Clearing Corporation launched a limited pilot for US Treasury securities on blockchains. In South Korea, Ripple partnered with Kyobo Life Insurance for tokenized government bond transactions. In Japan, Japan Securities Clearing Corporation launched a trial in April with Mizuho, Nomura, and Digital Asset to test blockchain-based collateral using Japanese government bonds.
