The Hong Kong Monetary Authority (HKMA) is teaming up with the Bank for International Settlements (BIS) Innovation Hub to explore the use of blockchain digital infrastructure for the tokenisation of green bonds to facilitate grassroots ESG investments.
HKMA and BIS Innovation Hub Hong Kong Centre have teamed up with a slew of leading tech companies to launch Project Genesis – a digital infrastructure and green bond tokenisation initiative.
Project Genesis will explore the tokenisation of green bonds that will permit smaller scale investments by retail clients as well as real-time tracking of environmental outputs using smart devices.
It will also involve the development of a prototype digital infrastructure consisting of multiple permissions blockchains that will facilitate the tokenisation process, and increase the transparency of the use of funds and performance outcomes.
Other partners in Project Genesis include Digital Asset (Switzerland) and GFT Technologies Hong Kong – who will be responsible for the deployment of multiple permission blockchains.
Liberty Consortium, comprised of SC Ventures, Standard Chartered Bank and Shareable Asset, will concurrently deploy a public permissionless blockchain infrastructure, while Hong Kong SAR startup Allinfra will provide verified data for the real-time tracking for the positive environment impacts of investment projects.
“Our vision is that you can download an app to your phone, and invest any amount into safe government bonds, which will develop a green project – let’s say a solar or wind farm,” said Bénédicte Nolens, Head of the BIS Innovation Hub Hong Kong Centre.
“Over the bond’s lifetime, you would be able to not just see accrued interest, but also track in real time how much clean energy is being generated, and the consequent reduction in CO2 emissions linked to your individual investment. Further, you could sell the bonds in a transparent market.”
“The HKMA welcomes the collaboration with BIS Innovation Hub on this novel experimentation on the symbiosis of sustainability and tech,” said Edmond Lau, Deputy Chief Executive of the HKMA.
“Technologies such as blockchain and smart contracts, combined with the internet-of-things, could streamline the bond issuance process, improve efficiency in distribution and facilitate reporting on the use and environmental impact of green bonds proceeds, thus enhancing transparency to green bond investors.”