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Hong Kong issues tokenized green bond, will allow citizens to trade crypto June 1

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(Kitco News) - The government of Hong Kong has announced the successful issuance of a tokenized green bond valued at 800 million Hong Kong dollars ($101 million), which was made possible by the Government Green Bond Program (GGBP).

The green bond was announced on Thursday, and the issuance makes the Government of the Hong Kong Special Administrative Region of the People’s Republic of China (the HKSAR Government) the first global governmental body to issue a green bond.

To help launch the bond, the government utilized a four-bank syndicate – two of which also act as investor custodians – to distribute the bond, while the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA) will serve as the clearing and settlement system for the bond by leveraging Goldman Sachs’ tokenization platform - GS DAP.

The one-year tokenized green bond offers a yield of 4.05%, and the “Processes of the bond lifecycle, including coupon payment, settlement of secondary trading and maturity redemption, will also be digitalized and performed on the private blockchain network,” the press release said. “The on-chain records on the private blockchain network will be the legally definitive and final records of ownership of the securities tokens and cash tokens for the parties on the platform.”

This development has been years in the making as the HKMA has been exploring the issuance of green bonds since at least 2021. Green bonds serve to fund eco-friendly projects, and tokenization allows the bonds to be sold digitally with ease.

“Distributed ledger technology (DLT) holds promise for revolutionising the operation of the financial markets,” said Mr. Eddie Yue, Chief Executive of the HKMA. “The Tokenised Green Bond issuance with on-chain DvP settlement using cash tokens issued by the HKMA is an important step forward in promoting the adoption and realization of the full potential of DLT in the bond market. Building on the experience from this issuance, the HKMA and the Government will work with other stakeholders to conduct further tokenized issuances to push the boundary and encourage usage.”

Hong Kong to allow retail traders to access "highly liquid" virtual assets

Hong Kong citizens will soon be allowed to trade cryptos

Hong Kong’s plan to allow citizens to trade crypto may soon become a reality according to Twitter user NoodleofBinance, who tweeted on Wednesday that, beginning June 1st, Hong Kong will officially make buying, selling and trading cryptos fully legal for all citizens.

“Expect a huge influx of big money from the East,” NoodleofBinance said, adding, “Asian currency based stablecoin coming out of HK will be a certainty as well.”

Under the current rules, crypto trading in Hong Kong is limited to professional investors, which are defined as individuals with a portfolio of at least HK$8 million (US$1.02 million).

In a follow-up tweet, the crypto proponent said that the “US dollar stablecoin will no longer be the only [token] in town. I envision we trade multiple stablecoin currency pairs and there will be tons of arbitrage opportunities,” similar to what was seen in the 2017 bull market when the BTC/CNY pair was still prevalent and enabled people to make “fortunes arbitraging Yuan pair and US dollar pairs.”

Adding extra credence to this announcement, Coinbase CEO Brian Armstrong replied to the NoodleofBinance tweets warning that the U.S. risks falling behind in the blockchain race due to its lack of clear regulations and inability to pass meaningful legislation.

“America risks losing its status as a financial hub long term, with no clear regs on crypto, and a hostile environment from regulators,” Armstrong said. “Congress should act soon to pass clear legislation. Crypto is open to everyone in the world and others are leading. The EU, the UK, and now HK.”

The possibility of Hong Kong citizens gaining access to trading crypto has been in the works for months, ever since the government first announced that it was exploring the topic in October. On Monday, DBS Group, the largest bank in Singapore, revealed that it is planning to apply for a license that would allow it to offer crypto services to Hong Kong residents as part of the Chinese territory’s push to become a digital assets hub.

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