China Construction Bank Sells $3 Billion In Blockchain Bonds

China Construction Bank sells $3 billion in blockchain bonds. China Construction Bank has partnered with Hong Kong-based fintech firm Fusang to launch a US$ 3 billion blockchain debt deal, the first digital security to be sold by a Chinese technology bank.

As less financial intermediaries are involved in the process, Blockchain has made issuing traditional financial instruments, such as equities and bonds, possible at much lower costs.

The bonds will be sold in the form of certificates of deposits, generally sold at tens of thousands of yuan each, attracting mostly professional investors or other banks. They are also used, especially for small to medium-sized banks in China, for interbank funding.

By tokenising certificates of deposit on blockchain, retail investors can now buy the digital certificates in small amounts. China Construction Bank’s certificates of deposit will be issued through its Labuan branch with a tenor of three months. Issued at a minimum of US$100 each, the certificates will yield about 0.75 per cent at maturity, higher than the roughly 0.25 per cent interest rate per annum interest rates at banks.

The deal also allows investors to trade these China Construction Bank’s digital certificates using bitcoin, on Fusang Exchange, a digital exchange licensed by the financial regulator in Labuan, Malaysia. Trading of the bond, which can also be done in US dollar, will begin this Friday.

If this transaction is a hit with investors, Fusang hopes to work with the state-owned bank on issuance in other currencies, including yuan, said Henry Chong, chief executive at Fusang. China Construction Bank will make US$ 58 million worth of digital certificates eligible for public subscription as a first tranche of the US$ 3 billion initiative. The lead arranger will be Beijing-based China Construction Bank Corp, listed in Hong Kong and Shanghai.

[image: 珂 许]

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