The Bank for International Settlements (BIS) Innovation Hub has launched its inaugural green finance initiative, named Genesis. This project aims to explore the tokenization of green bonds, facilitating investments in smaller denominations while incorporating real-time monitoring of environmental outcomes.
In collaboration with the Hong Kong Monetary Authority, the BIS has established a consortium with six partner organizations tasked with creating the digital framework for the Genesis project. The initiative will encompass the entire lifecycle of bonds. Digital Asset (Switzerland) and GFT Technologies Hong Kong will implement various permissioned blockchains, while the Liberty Consortium—comprising SC Ventures, Standard Chartered Bank, and Shareable Asset—will leverage a public permissionless blockchain infrastructure. Additionally, Allinfra, a Hong Kong-based startup, will supply verified data technology to continuously track the positive environmental impact of the projects.
Bénédicte Nolens, head of the BIS Innovation Hub Hong Kong Centre, envisions a user-friendly app allowing individuals to invest any amount in secure government bonds that contribute to green initiatives, such as solar or wind energy projects. Throughout the bond’s duration, investors will be able to observe accrued interest and monitor, in real time, the amount of clean energy generated alongside the reduction in CO2 emissions linked to their investments. Furthermore, bonds may be traded in a transparent market.
Following initial design thinking workshops, the development teams are currently engaged in iterative sprints to create prototypes. The findings and results from these tests are expected to be released in the fourth quarter of 2021.