The China Construction Bank will sell bonds on the blockchain that can be paid in dollars or Bitcoin.
This was reported in the South China Morning Post.
It is worth noting that China Construction Bank is one of the four largest commercial banks in China and, according to Forbes, the second largest bank in the world.
It is no accident that bonds worth a considerable value of $ 3 billion.
This is the first sale of digital assets by a Chinese bank. This was made possible through a partnership with Hong Kong-based Fusang.
The bonds will be sold as certificates of deposit. Typically, they would be worth tens of thousands of dollars and therefore only accessible to institutional investors. Instead, by tokenizing them on the blockchain, the bonds are also available to retail investors, who can buy small quantities, starting at $ 100 each. They have one duration of three months and guarantee a profitability of 0.75%, more than 0.25% that banks usually guarantee.
China Construction Bank Bonds Available to Trade in Bitcoin
The other significant innovation is that these vouchers can be used to trade on the Fusang Stock Exchange, which complies with the regulations of Labuan, Malaysia. Trades can be done in Bitcoin or dollars and will start on Friday.
The first round of the 3 billion bonds will amount to $ 58 million.
The South China Morning Post explains that these bonds will not be covered by China's deposit insurance because they are dollar bonds.
However, there is a lot of expectation that they will sell.
The Fusang exchange hopes that a similar initiative will soon be replicated with other currencies, including the yuan and not just Bitcoin. For Felix Feng Qi, director of the China Construction Bank's Labuan office, this issuance will bridge the gap between the fintech sector and financial markets.
The truth is that China seems to maintain a ambiguous attitude towards cryptocurrencies. On the one hand, it seems to want to hinder its spread, on the other, it allows one of its largest banks to launch a product that is somehow related to BTC.
All this while Beijing develops its state cryptocurrency, which promises to change the industry around the world.