BIS, UN, HONG KONG MONETARY AUTHORITY CONCLUDE TOKENIZED GREEN BONDS TRIAL

Last updated: June 19, 2025, 19:55 | Written by: Mike Novogratz

Imagine a world where investing in environmentally friendly projects is as simple as buying a cup of coffee. : BIS Innovation Hub and Hong Kong Monetary Authority conclude first green finance project; : BIS Innovation Hub and HKMA investigate how tokenised green bonds can improve sustainable investment; Video: BISIH - Finance for a greener and cleaner world; Mobilizing Capital for the Brown to Green Transition: Panel ofA world where you can directly see the positive impact your investment is making on the planet. IAMSmart is a local Hong Kong utility that allows merchants and service providers to easily verify and onboard Hong Kong customers. Hong Kong residents are able to register in IAMSmart with their personal data and then utilise their IAMSmart account to conduct authorization and authentication activity with other applications.This vision is moving closer to reality thanks to a groundbreaking initiative led by the Bank for International Settlements (BIS), the United Nations Climate Change Global Innovation Hub, and the Hong Kong Monetary Authority (HKMA).They have successfully concluded a trial, known as Project Genesis 2.0, focused on tokenized green bonds.This collaborative effort explores the potential of blockchain technology to revolutionize green finance, making it more accessible, transparent, and impactful.The goal is to build a prototype digital infrastructure that enables green investments and helps issuers and governments meet their environmental and sustainability goals.This initiative represents a significant step forward in mobilizing capital for a greener and cleaner future, and it all began in 2025 with Project Genesis 1.0.This article delves into the details of Project Genesis 2.0, its implications, and what it means for the future of sustainable investment. BIS, UN, Hong Kong Monetary Authority conclude tokenized green bonds trial Project Genesis 2.0 continued the joint effort of exploring blockchain opportunities for green investments. 3062 Total viewsThe key takeaway is that tokenization and blockchain technology could unlock new avenues for funding critical environmental projects.

What is Project Genesis 2.0 and Why Does it Matter?

Project Genesis 2.0 is a collaborative project spearheaded by the Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre, the Hong Kong Monetary Authority (HKMA), and the United Nations Climate Change Global Innovation Hub. The Bank for International Settlements (BIS) Innovation Hub announced today the successful conclusion of Project Genesis, two prototype digital platforms that aim to enable investment in green bonds with higher transparency and greater access to retail investors.It builds upon the foundation laid by Project Genesis 1.0 and focuses on developing a prototype digital platform for issuing and trading tokenized green bonds. BIS, UN, Hong Kong Monetary Authority conclude tokenized green bonds trial UTC The Bank for International Settlements (BIS), the Hong Kong Monetary Authority and the United Nations Climate Change Global Innovation Hub presented the results of their Genesis 2.0 initiative.But what exactly are tokenized green bonds, and why are they so important?

Green bonds are debt instruments specifically earmarked to raise money for environmentally friendly projects. The Bank for International Settlements (BIS), the Hong Kong Monetary Authority and the United Nations Climate Change Global Innovation Hub presented the results of their Genesis 2.0 initiative.Tokenization, on the other hand, is the process of representing real-world assets, like bonds, as digital tokens on a blockchain.Combining these two concepts creates tokenized green bonds, which offer several potential advantages:

Increased Transparency: Blockchain's inherent transparency allows investors to track the use of funds and verify the environmental impact of the projects being financed.
Greater Accessibility: Tokenization can lower the minimum investment amount, making green bonds accessible to a wider range of retail investors.
Improved Efficiency: Blockchain can streamline the issuance and trading process, reducing costs and increasing efficiency.
Enhanced Liquidity: Tokenized assets can be traded more easily on secondary markets, improving liquidity for investors.

Project Genesis 2.0 aimed to explore these benefits and demonstrate the feasibility of using blockchain technology to promote sustainable investment. The Hong Kong Monetary Authority s (HKMA) tokenisation journey started in 2025 when we collaborated with the Bank for International Settlements Innovation Hub Hong Kong Centre to concept-test tokenised green bonds. Earlier this year, we took that project forward by assisting the Government of the Hong Kong Special AdministrativeIt represents a crucial step towards unlocking the full potential of green finance and accelerating the transition to a low-carbon economy.

Key Features and Innovations of Project Genesis 2.0

While Project Genesis 1.0 explored the basic concept of issuing a blockchain-based green bond, Project Genesis 2.0 took things a step further by incorporating several innovative features. The Bank for International Settlements (BIS), the Hong Kong Monetary Authority and the United Nations Climate Change Global Innovation Hub presented the results of their Genesis 2.0 initiative. The project aims to explore the use of blockchain, smart contracts and the Internet of Things (IoT) for a global environment cause.These innovations focused on automating environmental impact reporting and exploring novel financial structures.

Automated Impact Reporting

One of the key challenges in green finance is accurately tracking and reporting the environmental impact of projects.Project Genesis 2.0 addressed this challenge by exploring the use of smart contracts and the Internet of Things (IoT) to automate the reporting process.

Imagine a wind farm financed by tokenized green bonds. Previous experiments trialed the basics of issuing a blockchain green bond. This iteration explored automating the reporting on delivering the bond s green promises and a novel financial structure. The research involved the Hong Kong Monetary Authority, the UN Climate Change Global Innovation Hub, and two private consortia.IoT sensors could be used to collect data on the amount of electricity generated, the reduction in carbon emissions, and other key environmental metrics. Project Genesis 2.0 came as an extension of Project Genesis 1.0, conducted by the BIS and Hong Kong Monetary Authority in 2025. Back then, other private consortia tested the possibility of tokenization of retail green bonds using both a public blockchain and a permissioned blockchain.This data could then be automatically fed into smart contracts, which would generate reports and provide investors with real-time updates on the project's impact. The Bank for International Settlements (BIS) Innovation Hub Hong Kong Centre and the Hong Kong Monetary Authority joined forces with the tech industry. Aim is to build a prototype digital infrastructure that can enable green investments and help issuers and governments to meet environmental and sustainability goals. Work is guided by a panel of experts from public and private sector, civilThis automation would not only improve the accuracy and efficiency of reporting but also enhance trust and transparency.

Novel Financial Structure

In addition to automated impact reporting, Project Genesis 2.0 also explored a novel financial structure designed to incentivize positive environmental outcomes.The details of this structure have not been fully disclosed, but it likely involves linking the bond's performance to specific environmental targets. Bank for International Settlements (BIS) and the Hong Kong Monetary Authority (HKMA) concluded a project to build prototype digital platforms that aim to enable green bond issuance with higher transparency and greater access to retail investors. Project Genesis allows retail investors to buy and sell tokenized green bonds and see the positive environmental impact thatFor example, the bond's coupon payments might be tied to the achievement of certain carbon reduction goals.This would create a direct financial incentive for the issuer to ensure that the project delivers on its environmental promises.

The Role of Technology: Blockchain, Smart Contracts, and IoT

The success of Project Genesis 2.0 hinges on the effective integration of several key technologies:

Blockchain: Provides a secure and transparent platform for issuing, trading, and tracking tokenized green bonds.
Smart Contracts: Automate key processes, such as impact reporting and coupon payments, based on pre-defined rules.
Internet of Things (IoT): Enables the collection of real-time environmental data, providing accurate and verifiable information for impact reporting.

By combining these technologies, Project Genesis 2.0 demonstrates the potential to create a more efficient, transparent, and impactful green finance ecosystem.The use of blockchain ensures immutability and auditability, while smart contracts automate processes and reduce the risk of human error.IoT devices provide a reliable source of data, ensuring that impact reports are based on verifiable evidence.

Project Genesis 1.0: Laying the Foundation

It's important to understand that Project Genesis 2.0 is not a standalone initiative.It builds upon the work of Project Genesis 1.0, conducted by the BIS and Hong Kong Monetary Authority back in 2025.Project Genesis 1.0 focused on exploring the fundamental feasibility of tokenizing retail green bonds.The research involved private consortia testing the tokenization of retail green bonds using both public and permissioned blockchains.

This initial project provided valuable insights into the technical and regulatory challenges associated with tokenizing green bonds.It also highlighted the potential benefits of using blockchain to improve transparency and accessibility.Project Genesis 1.0 served as a crucial stepping stone, paving the way for the more ambitious and innovative Project Genesis 2.0.

The Impact on Retail Investors

One of the key goals of Project Genesis is to make green investments more accessible to retail investors.By tokenizing green bonds, the project aims to lower the minimum investment amount, allowing individuals to participate in financing environmentally friendly projects.This could have a significant impact on the green finance market, as it would unlock a new source of capital from retail investors who are increasingly interested in sustainable investing.

Project Genesis also allows retail investors to buy and sell tokenized green bonds and see the positive environmental impact that their investments are making.The increased transparency and accessibility of tokenized green bonds could help to build trust and confidence in the green finance market, attracting more retail investors and driving further growth.

Hong Kong's Role in the Tokenization Journey

The Hong Kong Monetary Authority (HKMA) has been actively exploring the potential of tokenization for several years.The HKMA's tokenisation journey started in 2025 when they collaborated with the Bank for International Settlements Innovation Hub Hong Kong Centre to concept-test tokenised green bonds.This collaboration demonstrates Hong Kong's commitment to promoting innovation in the financial sector and its ambition to become a leading hub for green finance.

By supporting projects like Genesis 1.0 and 2.0, the HKMA is playing a crucial role in shaping the future of green finance.The successful conclusion of Project Genesis 2.0 is a testament to Hong Kong's expertise in blockchain technology and its commitment to sustainability.

Addressing Potential Challenges and Risks

While tokenized green bonds offer numerous potential benefits, it's important to acknowledge that there are also challenges and risks that need to be addressed.These include:

Regulatory Uncertainty: The regulatory landscape for tokenized assets is still evolving, and there is a need for clear and consistent regulations to provide legal certainty and protect investors.
Technological Risks: Blockchain technology is still relatively new, and there are potential risks associated with security vulnerabilities, smart contract errors, and scalability issues.
Greenwashing: There is a risk that issuers could misrepresent the environmental credentials of their projects, undermining the integrity of the green bond market.
Lack of Standardization: The lack of standardized definitions and reporting frameworks for green bonds can make it difficult for investors to compare different investment opportunities.

To mitigate these risks, it's crucial to develop robust regulatory frameworks, promote technological innovation, and establish clear standards for green bond issuance and reporting.Collaboration between regulators, industry participants, and technology providers will be essential to ensure the responsible and sustainable development of the tokenized green bond market.

The IAMSmart Integration

The IAMSmart, a local Hong Kong utility, played a crucial role in Project Genesis 2.0.This platform allows merchants and service providers to easily verify and onboard Hong Kong customers.Hong Kong residents can register in IAMSmart with their personal data and then utilize their IAMSmart account to conduct authorization and authentication activity with other applications.

The integration of IAMSmart streamlines the Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, making it easier for retail investors to participate in the tokenized green bond market.This integration enhances security and efficiency, contributing to a more user-friendly experience for investors.

Expert Opinions and Perspectives

Project Genesis 2.0 was guided by a panel of experts from the public and private sectors, as well as civil society.This diverse group of experts provided valuable insights and guidance throughout the project, ensuring that it addressed the needs of all stakeholders.Their expertise was crucial in navigating the complex technical, regulatory, and environmental challenges associated with tokenized green bonds.

The involvement of experts from the United Nations Climate Change Global Innovation Hub also highlights the importance of aligning green finance initiatives with global sustainability goals.By incorporating the expertise of environmental specialists, Project Genesis 2.0 ensures that tokenized green bonds are truly contributing to a greener and cleaner future.

The Future of Tokenized Green Bonds

The successful conclusion of Project Genesis 2.0 represents a significant milestone in the development of the tokenized green bond market.The project has demonstrated the feasibility of using blockchain technology to improve transparency, accessibility, and efficiency in green finance.However, there is still much work to be done before tokenized green bonds can become a mainstream investment option.

In the coming years, we can expect to see further innovation in this space, with new technologies and financial structures being developed to address the challenges and risks associated with tokenized green bonds.We can also expect to see increased collaboration between regulators, industry participants, and technology providers to create a more mature and sustainable market.

What are the next steps after Project Genesis 2.0?

While the findings of the trial are important, further refinement in a number of areas is necessary before real-world implementation.These steps include:

Collaboration with stakeholders and industry experts
Development of comprehensive regulatory frameworks
Improvement of the technological infrastructure supporting the platform

Conclusion: Key Takeaways and the Path Forward

Project Genesis 2.0, a collaborative effort between the BIS, UN, and HKMA, marks a pivotal moment in the evolution of green finance.By successfully concluding the tokenized green bonds trial, they've demonstrated the immense potential of blockchain technology to revolutionize how we fund environmentally sustainable projects.The project's focus on increased transparency, greater accessibility for retail investors, and automated impact reporting addresses critical challenges in the current green finance landscape.

Key takeaways from Project Genesis 2.0 include:

Tokenization can significantly improve the transparency and efficiency of green bond issuance and trading.
Blockchain technology enables automated impact reporting, providing investors with real-time updates on the environmental impact of their investments.
Lowering the minimum investment amount can make green bonds more accessible to retail investors, unlocking a new source of capital for sustainable projects.

The path forward involves addressing regulatory uncertainties, mitigating technological risks, and establishing clear standards for green bond issuance and reporting.Collaboration between regulators, industry participants, and technology providers will be essential to ensure the responsible and sustainable development of the tokenized green bond market.Ultimately, the success of Project Genesis 2.0 paves the way for a future where green investments are more accessible, transparent, and impactful, contributing to a more sustainable world.Now, it's time to build on this momentum and create a truly global ecosystem for tokenized green finance.