China Construction Bank sells US$3 billion worth of debt on blockchain
- First from a Chinese bank, the US$3 billion digital certificates of deposit set to be traded on a digital exchange in Labuan, Malaysia using bitcoin
- Blockchain is making stocks and bonds more accessible to retail investors
China Construction Bank has partnered with Hong Kong-based fintech company Fusang to launch the sale of US$3 billion worth of debt on a blockchain, the first digital security issued by a Chinese bank on the technology.
Blockchain has made issuing conventional financial instruments, such as equities and bonds, possible at much lower costs as fewer financial intermediaries are involved in the process.
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.