December 02, 2024<\/p>\n\n\n\n
By Our Correspondent<\/p>\n\n\n\n
The Hong Kong Monetary Authority (HKMA) will offer subsidies to select companies engaged in the issuance of tokenised bonds within the local market, as the city advances its integration of blockchain technology into the financial services sector.<\/p>\n\n\n\n
This initiative is part of a broader strategy to position Hong Kong as a center for virtual assets. The HKMA has introduced a three-year grant program that will allocate up to HK$2.5 million (approximately US$321,000) in subsidies for each qualified tokenised bond issuance, with a limit of two issuances per issuer, as announced on Thursday.<\/p>\n\n\n\n
Tokenised bonds utilize a blockchain\u2014a decentralized digital ledger\u2014to record beneficial interests, moving away from traditional computerized book entries. This new scheme builds on two earlier initiatives by the Hong Kong government, which included the issuance of HK$800 million in tokenised green bonds in February 2023 and approximately HK$6 billion in multicurrency digital bonds issued in the same month.<\/p>\n\n\n\n
Kenneth Hui, an executive director at the HKMA, stated during a media briefing on Thursday that the first issuance demonstrated the viability of tokenised bonds in Hong Kong, while the second issuance indicated that this business model could facilitate the mainstream adoption of bond tokenisation. The financial regulator aims to “push the boundaries” by transforming innovative concepts into practical applications, according to Hui. To qualify for the new HKMA grant, firms must adhere to specific criteria, such as issuing their products within Hong Kong and ensuring that their issuance teams maintain a significant presence in the region, as stipulated by the regulator.<\/p>\n\n\n\n
To be eligible for the full grant of HK$2.5 million, a tokenised bond issuance must have a minimum size of HK$1 billion. These bonds are required to be listed on either the Hong Kong stock exchange or licensed virtual asset trading platforms within the city. Hui noted that while tokenisation has the potential to enhance the transparency and efficiency of bond issuances, the integration of new technologies incurs additional expenses. The subsidies are designed to assist companies in overcoming their initial hesitance by providing financial incentives.<\/p>\n\n\n\n
The Hong Kong Monetary Authority (HKMA) has stated that it does not have a specific target for the number of grants to be distributed and will assess eligibility on an individual basis. Looking ahead, Hong Kong intends to investigate various applications of tokenised bonds in secondary markets, including the possibility of allowing banks to engage in short-term borrowing using digital bonds as collateral, a process known as repo financing, as mentioned by HKMA Chief Executive Eddie Yue Wai-man in a blog post released on Thursday.<\/p>\n\n\n\n
He further indicated that the regulator will consider enabling retail access to tokenised bonds; however, this initiative will require additional time and effort and will involve significant complexities related to legal, technological, and operational factors.<\/p>\n","protected":false},"excerpt":{"rendered":"
December 02, 2024 By Our Correspondent The Hong Kong Monetary Authority (HKMA) will offer subsidies to select companies engaged in the issuance of tokenised bonds within the local market, as the city advances its integration of blockchain technology into the financial services sector. This initiative is part of a broader strategy to position Hong Kong […]<\/p>\n","protected":false},"author":4,"featured_media":6777,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-6775","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-uncategorized"},"yoast_head":"\n