JPMorgan, HSBC join Hong Kong tokenized bond working group

Hong Kong has established a tokenized bond expert group that brings together major financial institutions after issuing more than HK$6.8 billion ($868 million) in tokenized government bonds across multiple offerings.

According to a statement released Friday by the Hong Kong Monetary Authority (HKMA), the newly formed group includes participants from JPMorgan Securities, HSBC, Standard Chartered Bank, UBS, Ant Digital, HashKey Group, and several other industry organizations. 

The HKMA said the group will study policy measures, market practices, and emerging innovations that could support wider use of tokenized bonds in the financial system.

Formed after its first meeting in May, the group has already begun discussions on how Hong Kong’s existing legal and regulatory framework applies to the issuance and trading of tokenized bonds, according to the HKMA.

The latest move adds to Hong Kong’s multi-year effort to bring traditional capital market instruments onto blockchain-based infrastructure. Earlier projects included a partnership with the Bank for International Settlements in 2021 to explore bond tokenization and a series of government-backed digital bond issuances that followed.

Hong Kong builds on previous tokenized bond issuances

Government-backed issuance activity has played a central role in the city’s tokenization strategy.

In February 2023, the Hong Kong government issued HK$800 million ($102 million) of tokenized green bonds. A year later, authorities completed a HK$6 billion ($766 million) multi-currency digital green bond sale denominated in Hong Kong dollars, Chinese yuan, U.S. dollars, and euros.

According to the HKMA, the 2024 issuance also became the first digital bond offering to incorporate both the e-CNY and e-HKD. Hong Kong authorities previously described that transaction as the largest digital bond issuance completed at the time.

Industry participants involved in the new expert group view legal certainty and infrastructure development as necessary components for expanding adoption.

“Scaling up the commercial adoption of tokenized bonds is not merely a matter of technology implementation, but a systematic undertaking that requires the coordination of legal and regulatory frameworks, underlying infrastructure and the broader industry ecosystem,” Xiao Feng, chairman and CEO of HashKey Group, said in a statement to crypto media.

Global institutions advance tokenization projects

Outside Hong Kong, financial institutions and market infrastructure providers have continued to test blockchain-based versions of traditional financial products.

In the United States, the Depository Trust & Clearing Corporation has launched a limited pilot program that places representations of U.S. Treasury securities held by its depository subsidiary on blockchain networks.

Elsewhere in Asia, Ripple has partnered with Kyobo Life Insurance in South Korea to support tokenized government bond transactions. Japan Securities Clearing Corporation also began a trial in April alongside Mizuho, Nomura, and Digital Asset to test blockchain-based collateral arrangements backed by Japanese government bonds.

Participation from JPMorgan in Hong Kong’s expert group comes as large banks pursue tokenization initiatives in other markets as well. Earlier this month, The Wall Street Journal reported that the Clearing House, whose owners include JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, is developing a tokenized deposit network expected to launch in the first half of 2027.

According to the Journal, the planned U.S. system would allow tokenized bank deposits to move continuously across blockchain-connected payment infrastructure while remaining within the regulated banking sector.