The China Construction Bank, one of the ‘big four’ banks in China, has partnered with Hong Kong-based fintech firm Fusing to sell $3 billion worth of bonds on the blockchain. The bunds can be purchased using fiat or bitcoin.
According to the South China Morning Post (SCMP), this is the first digital security a Chinese bank issues on a blockchain. The costs of issuing the bonds are lowered by the technology as fewer financial intermediaries are involved in the process, it adds.
The publication details the bold will be sold in the form of certificates of deposit which mainly attract professional investors or other financial institutions. Their tokenization means they will also be available to retail investors, even though as an offshore U.S. dollar issuance the certificates will not be covered by China’s deposit insurance.
The bonds, SCMP adds, will be issued with a tenor of three months, at a minimum of $100 each. The certificates will yield “about 0.75% at maturity.” They will be tradeable on the Fusang Exchange, a digital asset trading platform licensed by Malaysia’s financial regulator. As such, it will be tradeable in both fiat and BTC.
The SCMP adds:
As a first tranche of the US$3 billion programme, China Construction Bank will make US$58 million worth of digital certificates available for public subscription.
Trading of the bonds will be subject to the exchange’s guidelines. If the issuance is popular among investors, Fusang’s chief executive officer Henry Chong noted the exchange plans to work with the state-owned bank on the issuance of bonds with other currencies, including the yuan.
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