BIS and Hong Kong Monetary Authority experiment with tokenized bonds

August 28, 2021

The Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre and the Hong Kong Monetary Authority (HKMA) joined forces with the technology industry on Project Genesis to build a prototype digital infrastructure that enables green investments, improves transparency on the use of proceeds, and thereby helps meet regional and global environmental and sustainability goals.

Tokenizing the bonds through blockchain technology will allow investors to buy small denominations of the assets, which the institutions hope will boost investment. Investors can also track environmental output in real time, said the statement quoted by Yahoo!Finance.

“Green and digital are not only interconnected but interdependent – the fate of one depends on the other. Green finance, accordingly, is a key priority of the BIS Innovation Hub and Genesis is an integral part of that”, said Benoît Cœuré, Head of the BIS Innovation Hub.

The project will target the full bond life cycle. In other words, the issuance process, payment of interest and redemption. There are two parallel tracks, one on multiple permissioned blockchains, operated by Digital Asset (Switzerland) and its partner GFT Technologies Hong Kong. The second track is the Liberty Consortium which will use a public permissionless blockchain. Consortium members include SC Ventures, Standard Chartered Bank and Shareable Asset. At the same time, Hong Kong’s Allinfra will be responsible for using blockchain to verify the sustainable use cases.

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