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Central banks' frameworks for managing foreign exchange reserves have traditionally balanced a triad of objectives: liquidity, safety and return. Pursuing these objectives involves explicit trade-offs. Recently central banks have shown interest in incorporating environmental sustainability objectives into their reserve management frameworks. Rather than a triad, central banks may analyse (and weigh) a tetrad of reserve management objectives in allocating part of their foreign exchange reserves to green bonds.

The Bank for International Settlements (BIS), the Hong Kong Monetary Authority and the United Nations Climate Change Global Innovation Hub presented the results of their Genesis 2.0 initiative. The project aims to explore the use of blockchain, smart contracts and the Internet of Things (IoT) for a global environment cause. The project resulted in two prototypes of tokenized green bonds, developed by two separate international teams, which are "de facto verified carbon credits" recognized by either international, national or other verification mechanisms.

The Hong Kong Monetary Authority (HKMA) is set to issue a second batch of tokenized green bonds. In February 2023, the Hong Kong Government issued its first tokenized green bond, which shortened the settlement process from the typical five business days to one day. The HKMA facilitated clearing and settlement, utilizing a private blockchain network. The second tokenized green bond issuance will explore additional new features, possibly using blockchain technology for the full lifecycle of bond issuance, from creation to redemption. https://www.hkma.gov.hk/eng/news-and-media/speeches/2023/12/20231205-1/