The Bank of International Settlements (BIS) is investigating the tokenisation of green bonds in a bid to promote sustainable investment.
The project, called Genesis, has been launched by the BIS’s Hong Kong-based innovation hub and is the bank’s first foray into green finance.
The objective is to allow small denominations to be invested in the bonds, thereby making the bonds more accessible to a wider array of investors.
Known as the bank for central banks, the BIS has teamed up with the Hong Kong Monetary Authority (HKMA) for the initiative which includes another six companies as part of a consortium tasked with developing the digital infrastructure for the bonds.
This includes the use of multiple permissioned and permissionless blockchains and data tracking tools able to track the environmental impact of the various green projects attached to the bonds.
“Our vision is that you can download an app to your phone and investment any amount into safe government bonds which will develop a green project – let’s say a solar or wind farm,” said Benedicte Nolens, head of the BIS Innovation Hub.
“Over the bond's lifetime, you would be able to not just see accrued interest, but also track in real time how much clean energy is being generated, and the consequent reduction in CO2 emissions linked to your individual investment,” added Nolens. “Further, you could sell the bonds in a transparent market.”
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