Hong Kong Bonds Tokenization Support – How Can Hong Kong Subsidize Your Bond Tokenization Expenses?

On 28 November 2024, the Hong Kong Monetary Authority ("HKMA") launched the Digital Bond Grant Scheme ("DBGS") and began accepting applications. The DBGS will run for an initial period of three years, providing financial support of up to HK$2.5 million to eligible digital bond issuers.

The DBGS is designed to promote the growth of Hong Kong's digital securities market and encourage financial institutions and issuers to adopt tokenization technology in capital market transactions.

A. Definition of Digital Bond

Under the DBGS, whether a bond qualifies as a digital bond will be assessed on a case-by-case basis. In general, a digital bond refers to a bond that uses distributed ledger technology ("DLT") to digitally represent ownership, which may include legal titles and/or beneficial interests in the bond.