Thursday, 6 October 2022

Blockchain a boon for green finance

5 min read

9 November 2021 – The Bank for International Settlements (BIS) Innovation Hub is reporting a positive case for the use of distributed ledger technology in streamlining the green bond issuance process, while making it easier to track projects' positive environmental impact. Working in concert with the Hong Kong Monetary Authority, the BIS in August formed a consortium with six partner companies to explore the tokenisation of green bonds, enabling investment in small denominations, combined with real-time tracking of environmental outputs. Dubbed Project Genesis, the initiative combined blockchain, smart contracts, internet-of-things, and digital assets to build prototype digital platforms that would allow retail investors to buy and sell tokenised green bonds and see the positive environmental impact that the financed projects achieve on an app. The first prototype simulates the lifecycle of a typical bond on a permissioned distributed ledger platform, including origination, subscription, settlement and secondary trading. A second prototype tested the same procedures using a public blockchain infrastructure.

News source: Finextra

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