Hong Kong is planning its third issuance of digital bonds.

The Government of the Hong Kong Special Administrative Region is planning the issuance of its third sovereign digital bond, with multiple banks appointed for the construction of this transaction, as revealed by insiders.

While the scale and timing of the issuance are currently undecided, this move demonstrates Hong Kong's continued push towards blockchain-based finance. If realized, it will follow the first tokenized green bond in February 2023 and subsequent multi-currency issuances one year later. The previous two issuances received positive feedback from institutional investors, serving as a case study to demonstrate the potential of blockchain technology in the traditional bond market.

Hong Kong's Ambitions as a Digital Financial Hub

This issuance plan demonstrates the growing ambition for Hong Kong to become a global hub for digital finance. Hong Kong officials emphasize the need to establish a "future-oriented" bond market, which can achieve faster, lower-cost, and more transparent issuance compared to traditional paper-based issuance. By advancing the third sovereign bond issuance, the government shows its confidence in technology and investor demand.

This announcement coincides with the growing interest from the corporate side. A few days before the government's actions became clear, China's state-owned enterprises, Shenzhen Futian Investment Holdings and Shandong Hi-Speed Holdings Group, priced their own digital bonds in Hong Kong. The participation of state-owned enterprises has not only enhanced the credibility of this field but also indicates that demand is rapidly expanding beyond pilot programs into regular fundraising activities.

Market Growth Driven by Enterprises

Hong Kong's digital bond market is not only government-led, but at least six other companies have already issued bonds in the market. This year alone, approximately $1 billion has been raised through digital bonds, with 70% of that achieved in 2025 alone.

Companies in mainland China and other regions are also beginning to consider this fundraising channel. According to John O'Neill, the digital assets head at HSBC, the bank has observed an increase in interest. Major law firm King & Wood Mallesons has reported a rise in inquiries from clients regarding the issuance of tokenized bonds.

HSBC's decentralized ledger platform "Orion HK" has already conducted over $1.7 billion in issuance. This includes transactions from governments, financial institutions, and corporations. Digital bonds are traditional bond securities, but what sets them apart is that they are issued and traded on the blockchain. Private platforms like HSBC Orion and public blockchains such as Ethereum support these.

Characteristics of Digital Bonds and Investor Segments

These bonds are denominated in conventional currencies such as US dollars, Hong Kong dollars, and Chinese yuan, and although the issuance form is new, it is familiar to investors.

The main purchasers are primarily investors who have traditionally bought bonds, and these bonds are purchased with traditional currencies. The lack of widely trusted stablecoins for settlement is a reason why the pool of cryptocurrency investors regarding exchange-traded derivatives is relatively small.

Promotion Measures by the Hong Kong Government

To support the market, the Hong Kong government is introducing financial incentives. Grants of up to HKD 2.5 million (approximately USD 325,000) are being offered for each eligible issuance.

By promoting both public and private issuers, Hong Kong aims to become a regional hub for digital finance. Faster settlement times, lower fees, and the transparency of blockchain are among its attractions.

The promotion of digital bonds in Hong Kong is not just about digital innovation. In Asia, there is a high demand for digital assets, and as the United States implements a pro-cryptocurrency policy, policymakers want to follow global trends. In this context, Hong Kong is trying to solidify its position as an international financial center amidst rapid changes in the financial system.

The stablecoin regulations of Hong Kong (Chapter 656), which came into effect on August 1, 2025, establish a licensing system for fiat currency-referenced stablecoins (FRS) and form part of the regulatory framework supporting the development of the digital bond market.