Securities Financing Technology News | BIS collaborates on digital green bond infrastructure

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The innovation hub of the Bank for International Settlements (BIS) in Hong Kong announced a collaboration with the Hong Kong Monetary Authority (HKMA) and six tech companies to build a prototype digital infrastructure that supports green investments.

This joint project, named Project Genesis, will provide an infrastructure infrastructure for sustainable investing, providing greater transparency on how the proceeds of green investment initiatives are used, thereby helping the industry to achieve its goals of sustainability in the Asia-Pacific region and globally.

Six partner companies have been selected to build the digital infrastructure of the Genesis project. Digital Asset, based in Switzerland, will partner with GFT Technologies in Hong Kong to deploy several authorized blockchains.

At the same time, the “Liberty Consortium”, which involves SC Ventures, Standard Chartered and Shareable Asset, will provide a publicly authorized blockchain.

Hong Kong start-up Allinfra will also provide technology-verified data that can track the environmental impact of these green projects in real time.

The first green finance project to be confirmed by the BIS Innovation Hub, Genesis will support the tokenization of green bonds, allowing bond investments to be fragmented and traded in smaller denominations.

Benôit Cœuré, head of the BIS innovation center, declares: “Green and digital are not only interconnected but interdependent, the fate of one depends on the other. Green finance is therefore a key priority of the BIS Innovation Hub and Genesis is an integral part of it. “

HKMA Deputy Managing Director Edmund Lau said: “HKMA welcomes the collaboration with BIS Innovation Hub on this new experimentation on the symbiosis of sustainability and technology.

“Technologies such as blockchain and smart contracts, combined with the Internet of Things, could streamline the bond issuance process, improve distribution efficiency, and facilitate usage and impact reporting. environmental impact of the green bond product, thereby improving transparency for green bond investors. “

The vision is that an investor can invest in government bonds, which will fund a green project – and, through a downloadable app or other means, the investor will be able to monitor interest accrued over the lifetime. of the investment, as well as the own amount of energy generated and the consequent reduction in CO2 emissions linked to individual investment, explains Bénédict Nolens, head of the BIS Innovation Hub Hong Kong.

After conducting design planning workshops, the development teams of the participating entities are now working on iterative sprints (short, agile project stages) to build the prototypes.

The results of tests and prototype trials are expected to be released in the fourth quarter of 2021.

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