Why Korean companies flock to Hong Kong to issue digital bonds

Korea's bond market has achieved a series of firsts in 2021, with digital bonds being issued by a securities firm, a private company, a public institution, and a bank. Mirae Asset Securities, POSCO International, Korea Housing Finance Corporation, and KB Kookmin Bank are the issuers involved, each representing different sectors. Despite their diverse backgrounds, all four deals share a common feature: they were issued on Hong Kong's blockchain infrastructure.

The Hong Kong Monetary Authority (HKMA) has been actively working to develop the digital bond ecosystem in the city. HKMA officials have noted that issuers from various jurisdictions, including Korea, have successfully issued digital bonds in Hong Kong. In January, Mirae Asset Securities launched a one-year multicurrency digital bond worth $41.4 million and $30 million.

Following suit in April, POSCO International issued a three-year $99.5 million digital bond. Korea Housing Finance Corporation added to the trend in May with a two-year $200 million bond issuance. KB Kookmin Bank completed the quartet in June by issuing a two-year $100 million digital bond. All four digital bonds were issued on Hong Kong's blockchain rails.