The Bank of China has issued 20 billion Renminbi ($2.8 billion) in blockchain-based bonds for small and micro-sized companies possessing their own blockchain platforms.
Chinese Bank follows Santander in issuing blockchain-based bonds
This Friday, one of the four major commercial banks in China, the Bank of China, announced that it is issuing billion in blockchain-based bonds to support small and micro-sized companies.
The bank announced that it had completed the process of pricing and issuing bonds this week. The bank revealed that the two-year bond would have a 3.25% coupon rate as the bank hopes to support these enterprises by raising funds for them. The statement noted that the bank had used its own blockchain-based bonds issuance system for the process. The bank highlighted that this was the first time for China that blockchain was being used to issue bonds.
The bank utilized its system to issue documents for ownership verification as well as proof of transactions.
The bond issuance assists in the country’s blockchain efforts as well as supports entrepreneurs with efficient access to funds. By the end of the third quarter of 2019, the bank has already lent over 400 billion Renminbi ($57.7 billion) to mover than 400,000 small and micro-sized companies.
Supporting finances for small and medium-sized companies (SMEs) is one of the major uses of blockchain in China. Industrial and Commerce Bank of China, the largest bank by assets in the world, began offering factoring services to SMEs in early 2018.
Previously, Spanish banking giant Santander issued bonds based on the Ethereum Network. The bank became the world’s first to issue blockchain-based bonds. However, the amount it issued ($20M) pales in comparison to Bank of China’s bond issuance of 2.8 billion dollars.
