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China Construction Bank (CCB) leveraged Hong Kong-based digital asset exchange Fusang to issue $ 3 billion worth of debt on a blockchain.
According to a report on Wednesday by the South China Morning Post, the tokenized bond certificates will be issued through the branch of the state-owned bank Labuan, Malaysia for a three-month period.
In particular, digital stocks will be exchangeable for bitcoin on the Fusang exchange, in addition to US dollars. Trading is expected to start this Friday.
If successful, Fusang intends to partner with China’s “Big Four” bank on issuing certificates in other currencies, including the yuan, Fusang CEO Henry Chong said in the report.
By issuing blockchain, CCB – the world’s second largest bank by market capitalization – aims to reduce the costs traditionally associated with financial intermediaries. It will also offer debt instruments at lower amounts to make them accessible to retail investors.
Bonds are negotiable debt securities issued by a government or company to support spending obligations. Chinese bonds usually trade for tens of thousands of yuan (over $ 4,000) which means they are mostly accessible to institutional and professional investors.
The bank aims to reduce that barrier to entry by making certificates available for as little as $ 100. They will offer approximately a 0.75% yield to maturity, above the average interest of 0.25% achieved annually at other banks. report indicated.
