HSBC issued $128 million digital promissory notes on Orion, introducing traditional asset liquidity.

HSBC recently issued a digital bond worth nearly $128 million on its proprietary distributed ledger platform Orion, as reported by Ledger Insights. This issuance is similar in structure to the previously issued $756 million digital green bond in Hong Kong by HSBC. Settlement and delivery services for this issuance were conducted through the CMU, a debt instrument central clearing system under the supervision of the Hong Kong Monetary Authority. To expand the sales reach, HSBC collaborated with Agricultural Bank of China, China Construction Bank, and Bank of Communications for underwriting, aiming to promote the adoption of distributed ledger technology and potentially introduce traditional asset liquidity.

DLT Platforms and Traditional Custodians Can Purchase Digital Bills

The newly issued digital bills have an interest rate of 3.6% with a settlement period of two days. This marks the first time a Hong Kong company has listed digital bills on the Hong Kong Stock Exchange (HKEX) and issued them in compliance with UK regulations. They are also integrated with other CMU systems, allowing users to purchase new bills directly on Orion. In addition, users can also trade through traditional methods such as custodian institutions and CMU accounts.

Guiding Traditional Investors to Use DLT Could Boost Liquidity

The issuance of digital bonds and bills can effectively reduce costs, improve efficiency, and reduce risks through payment and delivery. The integration of HSBC and the Hong Kong CMU system not only provides users accustomed to traditional asset acquisition methods with diverse channels but also promotes the use of distributed ledger technology, potentially increasing the liquidity of digital assets.