Hong Kong initiates digital bond distribution subsidies
Hong Kong Monetary Authority Launches Grant Program for Digital Bond Issuance
The Hong Kong Monetary Authority (HKMA) has announced the launch of a grant program for digital bond issuers. This program, which will run for three years, aims to support the growth of the digital bond market in Hong Kong.
According to the HKMA, a digital bond is a bond that uses distributed ledger technology (DLT) for digital representation of ownership. This could include legal titles and/or beneficial interests in the bond. The program covers tokenized bonds, which are bonds that leverage DLT for digital representation of ownership.
Under the grant program, each recipient is eligible for a maximum of two digital bond issuances. The subsidy provided by the HKMA covers up to half the expenses of each digital bond issuance, with a maximum of HK$2.5 million (US$ 321,000) in grants per digital bond issuance.
The HKMA uses the term 'digital bond' more expansively, including bonds issued conventionally and then a digital twin created on a blockchain. This means that the grant program includes bonds issued in traditional ways and then digitized for easier management and trading.
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It's worth noting that the subsidy program for digital bond issuance is not limited to the HKMA. The European Investment Bank (EIB) also offers a similar program, which was officially launched in December 2023 as part of a wind power promotion plan.
In conclusion, the HKMA's grant program for digital bond issuers is a significant step towards the digitalization of the bond market in Hong Kong. By supporting digital bond issuances, the HKMA is helping to create a more efficient, transparent, and inclusive financial system.
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