Another digital green bond sale in the pipeline

A second batch of tokenized green bonds is expected to be launched in the coming months, Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority said yesterday.

The news came amid reports that the de-facto central bank has requested local banks to increase the provision for non-performing loans to cope with the prolonged property slump in China.

Speaking at a summit yesterday, Yue said the authorities are studying to allow the entire process of bond issuance, including redemption, to be conducted in the blockchain.

The Hong Kong government issued HK$800 million worth of tokenized green bonds in February this year, marking the first tokenized green bond issued by a government globally.

Yue also believes that the cross-boundary wealth management connect scheme will see a significant increase in the number of investors if a series of new measures to enhance it is rolled out. A consultation on the enhancements including expanding the scope of eligible products is under way, Yue noted.

As of April, the scheme had attracted about 50,000 investors, who invested 3.4 billion yuan (HK$3.75 billion), the government data showed.

This came as the local Hong Kong Economic Journal reported that the HKMA expects the classified loan ratio - or nonperforming loan ratio - of the local banking system will rise to 2 percent by the end of this month.

The ratio had increased to 1.6 percent by the end of September due to exposure to the mainland property sector from 1.38 percent at the end of last year.

HKMA executives had recently met with representatives from local medium-sized banks and suggested that the industry should consider speeding up the disposal of problematic assets, the report noted.