Hong Kong Enlists JPMorgan and HSBC for Tokenized Bond Expansion

TLDR

• Hong Kong formed a new expert group to support wider adoption of tokenized bonds.
• JPMorgan Securities, HSBC, Standard Chartered Bank, UBS, Ant Digital, and HashKey joined the HKMA group.
• The group will review policy measures, market practices, and innovations for tokenized bond growth.
• The HKMA said the first discussions in May focused on legal and regulatory issues.
• Hong Kong has already issued tokenized green bonds worth HK$800 million and HK$6 billion.

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Hong Kong has formed a new expert group to support wider use of tokenized bonds. The Hong Kong Monetary Authority said the group includes JPMorgan Securities, HSBC, Standard Chartered Bank, UBS, Ant Digital, and HashKey Group. The group will review rules, market practices, and technology needs for larger tokenized bond issuance.

Hong Kong, JPMorgan Join Tokenized Bond Group

The HKMA announced the group on Friday as part of its tokenization work. It said the members will help shape steps for wider adoption and scalability.

The authority said the group will study policy measures and market standards. It will also review new tools that can support tokenized bond issuance and trading.

The first discussions took place in May, according to the HKMA. Those talks focused on Hong Kong’s legal and regulatory regime for tokenized bonds.

The group also examined how existing rules apply to issuance and transactions. This work covers both primary bond sales and secondary market activity.

JPMorgan Securities joined the group with other global financial firms. HSBC, Standard Chartered Bank, UBS, Ant Digital, and HashKey Group also joined the initiative.

The HKMA said the group brings together banks, technology firms, and market participants. It aims to address practical issues that can affect tokenized bond growth.

HKMA Builds on Earlier Digital Bond Sales

The new group follows several bond tokenization projects in Hong Kong. In 2021, the HKMA worked with the Bank for International Settlements on bond tokenization research.

In February 2023, the Hong Kong government issued HK$800 million in tokenized green bonds. The deal had a value of about $102 million at the time.

Hong Kong later issued a HK$6 billion digital green bond offering in 2024. The sale had a value of about $766 million and used four currencies.

The 2024 offering included Hong Kong dollars, Chinese yuan, U.S. dollars, and euros. It also expanded the government’s use of digital bond infrastructure.

Last year, Hong Kong announced its largest digital bond issuance on record. The deal also became the first to integrate both e-CNY and e-HKD.

HashKey Group chairman and CEO Xiao Feng said the work needs more than technology. He said adoption requires legal rules, infrastructure, and the wider market to work together.

The U.S. Depository Trust & Clearing Corporation has also started a limited blockchain pilot. The pilot places representations of U.S. Treasury securities held by its depository unit on blockchains.

In South Korea, Ripple has partnered with Kyobo Life Insurance on tokenized government bond transactions. In Japan, Japan Securities Clearing Corporation began a trial in April with Mizuho, Nomura, and Digital Asset.

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