Hong Kong is preparing to issue its third digital bond this month, a green bond denominated in USD, EUR, RMB and HKD. The RMB and HKD legs can be settled using tokenized central bank money. Yesterday the Hong Kong Monetary Authority confirmed that Project Ensemble, which includes a wholesale CBDC, will start live pilots.
A few other countries have conducted similar transactions. The Swiss National Bank has a long term pilot wholesale CBDC which is issued on the SIX Digital Exchange platform and has been used to settle several bond issuances. During last year’s Eurosystem DLT settlement trials, a wholesale CBDC from the Banque de France was used to settle several transactions, including the first digital bond issuance by an EU state, Slovenia.
Beyond the central bank money aspect, the three major ratings agencies have rated the digital native note as equivalent to other conventional bonds issued by Hong Kong SAR. But they had different rationales.
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