The Hong Kong Monetary Authority (HKMA) will subsidise some companies in issuing tokenised bonds in the local market, as the city forges ahead in incorporating blockchain in the financial services sector amid a push to become a virtual-asset hub.
The city’s de facto central bank has launched a three-year grant scheme that will hand out up to HK$2.5 million (US$321,000) in subsidies per issuance to qualified tokenised-bond issuers, for a maximum of two issuances, the HKMA said on Thursday.
Tokenised bonds record beneficial interests on a blockchain – a distributed digital ledger – instead of using traditional computerised book entries.
The scheme follows two previous projects introduced by the Hong Kong government, including HK$800 million of tokenised green bonds launched in February 2023 and around HK$6 billion of multicurrency digital bonds issued in February this year.
The first issuance proved that offering tokenised bonds “works in Hong Kong”, Kenneth Hui, an executive director at HKMA, said in a media briefing on Thursday. The second issuance showed that the business model can help “bring bond tokenisation to the mainstream market”, he added.
The financial regulator is hoping to “push the boundaries” by turning concepts into real-world applications, Hui said.