Hong Kong initiates digital bond allocation program
Hong Kong Monetary Authority Launches Grant Program for Digital Bond Issuers
In a significant move towards digital finance, the Hong Kong Monetary Authority (HKMA) has launched a grant program for digital bond issuers. The program, which began operating yesterday, will run for the next three years.
The grant program covers a wide range of digital bonds, including those issued natively on a blockchain, as well as those issued conventionally and then tokenized. According to the HKMA, a digital bond is a bond that leverages distributed ledger technology (DLT) for digital representation of ownership.
The program offers subsidies that cover up to half the expenses of each digital bond issuance, with a maximum of HK$2.5 million (US$ 321,000) in grants per issuance. The maximum number of digital bond issuances that can be subsidized is two.
The term 'digital bond' used by the HKMA includes legal titles and/or beneficial interests in the bond. This means that the subsidy applies not only to the digital representation of the bond itself but also to the ownership rights associated with it.
While the organization launching and running the digital bond promotion program for the next three years has not been directly specified, relevant financing initiatives mentioned include the European Investment Bank (EIB), which has started a funding project with a volume of 5 billion euros to support European wind energy manufacturers. Deutsche Bank is a partner in this project, targeting companies in the European wind industry.
However, there is no explicit mention of a digital bond promotion program with named countries supported by the EIB.
The HKMA's grant program for digital bonds is part of the authority's efforts to foster the growth of the digital asset market in Hong Kong and position the city as a global hub for digital finance.
As the digital bond market continues to grow and evolve, initiatives like the HKMA's grant program are expected to play a crucial role in driving innovation and adoption of this new financial instrument.
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