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Chinese bank to use blockchain to sell $3 billion worth of debt

TL;DR

  • Chinese bank, China Construction Bank, is planning to sell $3 billion worth of bonds using blockchain-based technology.
  • The bank has partnered with Hong Kong-based fintech company Fusang to prepare the launch.
  • Fusang hopes the partnership will be the first of many bond offerings using its technology.

Chinese banking giant, China Construction Bank, plans to use blockchain-based technology to sell up to $3 billion worth of bonds.

Chinese banking giant, Chinese Construction Bank (CCC), is reportedly considering selling up to $3 billion worth of bonds using blockchain-based technology. The sale will allow investors to purchase the bonds in either cash of a cryptocurrency such as Bitcoin.

CCC is partnering with Fusang, a fintech company based in Hong Kong, to carry out the sales. The partnership will target both individual and institutional investors in a bid to increase the number of potential buyers.

 For the first time, these buyers can also include non-Chinese investors that can buy a bond for as little as $100. In return, the bond will offer investors an annualized return of approximately 0.75%. The bonds offered by the Chinese bank will be listed on Fusang’s exchange which also supports cryptocurrency.

The bond will be offered as a certificate of deposit, issued through CCC’s Malaysian arm in Lauban, who will begin issuance this Friday.

Fusang views this offering as a test for its blockchain-based platform saying that if it goes well, Fusang hopes to work with more Chinese banks on the issuance of the yuan, and potentially other currencies.

CCC’s chief officer in Lauban said that this test will “narrow the divide between fintech and the wider financial markets”.

Issuing bonds using blockchain technology has been gaining some traction across Asia. Earlier this year, the Bank of Thailand launched a series of government savings bonds using IBM Cloud’s blockchain-based technology; a world-first.

Bank of Thailand said that the launch was aimed at reducing the time that it would take to issues bonds (in this case, from 14 days down to 2) and increasing the accessibility of their bonds to smaller institutional or individual investors.

If these initial blockchain-based bond offerings find success, we could see more and more use of blockchain-based technology in the bond-issuing world.

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Emmanuel Young

Having entered the cryptoworld in 2013, Emmanuel is a broker, investor and crypto enthusiast. He has contributed to a number of crypto related projects and enterprise and sees the industry as the future of finance.

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