SOAS Centre for Sustainable Finance launches new study on “Sovereign Solutions: Accelerating Tokenised Bonds for Sustainable Development and Climate Impact”
The SOAS Centre for Sustainable Finance launched a new study on “Accelerating the adoption of digital and tokenised sovereign bonds in emerging and developing economies to fund climate action and sustainable development” at an event at London Climate Action Week.
Enhancing domestic capital mobilisation and the supply of local currency finance is a critical precondition for reducing the cost of capital and fostering sustainable domestic investment. In an era defined by widening investment gaps, capital flight, and contracting foreign aid, emerging market and developing economies (EMDEs) are forced to rethink sovereign fundraising strategies.
The new study assesses the potential of sovereign digital finance to expand domestic financial resource mobilisation and local financing capacity in EMDEs to scale up investment in sustainable development and climate action. Grounded in empirical evidence, the study evaluates the modular benefits of digital sovereign fundraising platforms, ranging from mobile-app-enabled retail access to programmable, tokenised sustainable bonds. Reviewing innovative approaches in sovereign bond issuances in the Philippines, Indonesia, Kenya, Thailand, Hong Kong, and Singapore, the authors Yuen C. Lo, Ulrich Volz, and Marianne Haahr propose a roadmap for advancing digital sovereign bonds, taking into the account the necessary legal and regulatory frameworks and requirements for developing core technology infrastructure.
At the London Climate Action Week launch event, the authors presented their study and discussed their recommendations and the challenges and opportunities around digital bond issuances on a panel with Sean Kidney, CEO of the Climate Bonds Initiative and Professor in Practice for Sustainable Finance at SOAS, and Victor Murinde, AXA Professor of Global Finance at SOAS.
Header image credit: Matthew Smith via Unsplash.
