China Construction Bank Set to Issue $3B Worth of Bonds on Blockchain
One of the big four banks in the People’s Republic of China the China Construction Bank (CCB) is gearing up for launching the sale of $3 billion worth of bonds on a blockchain. For issuing these bonds on the blockchain, the Chinese bank has joined forces with Fusang a cryptocurrency exchange based in Labuan. These bonds can be purchased with Bitcoin.
As reported by South China Morning Post on Wednesday, these bonds will be available to both retail as well as institutional investors and they can purchase these digital securities on the Malaysian exchange Fusang. Investors will have the opportunity to buy bonds both with the United States Dollar (USD) as well as with Bitcoin (BTC), the top-ranked digital currency. Trading is set to start from Friday and at least $100 is required for investment.
A yield of around 0.75 percent at maturity will be offered by these bonds. This yield ratio is more than that of an average rate of a bond issued by a Chinese bank which is approximately 0.25 percent.
Known as Longbond SR Notes, the bond is sponsored by the bank and it will be issued by the Chinese lender’s Labuan-regulated Malaysian branch. Commenting on this, the Principle Officer of CCB Labuan Felix Feng Qi said that they are pleased to act as a lead arranger for this debt security which has been listed for the first time on blockchain. He said that they intend to strengthen “technological boundaries” in a bid to offer their associates, customers, and clients a range of services and value-added products.
Chief Executive Officer (CEO) of Labuan-regulated securities exchange Fusang Henry Chong commented:
“Issuers no longer need to operate in a fragmented environment with multiple process flows as FUSANG’s end-to-end platform streamlines their needs, from issuance to listing, in one place. Global investors can now benefit from access to an investment previously reserved for only the largest institutions, together with low and transparent fees.”
As per the report, it is the first time that a Chinese bank is going to issue bonds on a blockchain. China Central Bank is also known as the second-largest bank in the world by market capitalization.
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