The HKMA and Financial Services and the Treasury Bureau said Hong Kong’s existing framework can support broader use of distributed ledger technology in fixed-income markets.
Hong Kong has completed a first-phase review of how distributed ledger technology can be expanded in its fixed-income market, with authorities concluding that the city’s legal and regulatory framework is flexible enough to support tokenized bond issuance. The assessment was announced by the Hong Kong Monetary Authority and the Financial Services and the Treasury Bureau, which pointed to three landmark government tokenized bond offerings as well as increasing corporate issuance from Asian and Middle Eastern issuers. The finding matters because tokenized bonds use blockchain-based infrastructure to represent and settle debt securities, a structure policymakers and market participants see as a way to streamline issuance and post-trade processes.