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BIS to investigate tokenised green bonds

BIS to investigate tokenised green bonds

The Bank for International Settlements Innovation Hub has started its first green finance project, Genesis, which will explore the tokenisation of green bonds enabling investment in small denominations, combined with real-time tracking of environmental outputs.

Working in concert with the Hong Kong Monetary Authority, the BIS has formed a consortium with six partner companies that will design the digital infrastructure for the Genesis project.

Targeting the full bond lifecycle, Digital Asset (Switzerland) and GFT Technologies Hong Kong will deploy multiple permissioned blockchains. Concurrently, the Liberty Consortium, consisting of SC Ventures, Standard Chartered Bank and Shareable Asset, will utilise a public permissionless blockchain infrastructure. Allinfra, a Hong Kong SAR startup, will provide technology verified data that can track in real-time the positive environmental impact of projects.

Bénédicte Nolens, head of the BIS Innovation Hub Hong Kong Centre, states: "Our vision is that you can download an app to your phone, and invest any amount into safe government bonds, which will develop a green project - let's say a solar or wind farm. Over the bond's lifetime, you would be able to not just see accrued interest, but also track in real time how much clean energy is being generated, and the consequent reduction in CO2 emissions linked to your individual investment. Further, you could sell the bonds in a transparent market."

After starting with design thinking workshops, the development teams are now working in iterative sprints to build the prototypes, says Nolens.

The results of the tests and prototypes will be published in the fourth quarter of 2021.

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