The Hong Kong government is reportedly preparing to issue its third batch of green/social/infrastructure digital bonds and has recently been in contact with interested parties.

The potential tokenized bonds are expected to have terms of 2, 3, and 5 years. They may be issued through HSBC Orion, a distributed ledger technology (DLT) platform operated by HSBC Holdings PLC, and integrated with the Hong Kong Monetary Authority's debt instrument Central Moneymarkets Unit (CMU) to enable international investor participation.

Investors will be able to access these digital bonds through existing CMU infrastructure connections with Euroclear and Clearstream, following the same investment model used for the Hong Kong government's digital bonds issued in February 2024.

Participating banks may include HSBC Holdings PLC, Bank of China (Hong Kong), Bank of Communications, BNP Paribas, Amundi, ICBC (Asia), JPMorgan Chase, Standard Chartered Bank, Société Générale, and UBS.

On September 1, Paul Chan, Secretary for Financial Services and the Treasury of Hong Kong, stated at a Legislative Council Panel on Financial Affairs meeting that the Hong Kong SAR government would regularize tokenized bond issuance, with the Monetary Authority preparing to assist the government in issuing the third batch of tokenized bonds.

The Hong Kong government's 2025-26 budget mentions that the SAR government will standardize tokenized bond issuance, aiming to encourage broader participation from issuers and investors in digital bond product issuance and distribution.

Tokenized bonds can minimize fragmented processes in issuance, trading, settlement, and distribution.