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- BOCI becomes the first Chinese bank to issue tokenized security.
- It is also the first of its kind in the Asia Pacific.
Bank of China’s subsidiary, BOCI makes history after becoming the first Chinese financial institution to issue tokenized security in Hong Kong. According to the report, BOCI has issued CNH 200 million ($28 million) in digital structure notes minted on the Ethereum blockchain. Interestingly, Investment banking company UBS originated the products and was allocated to its clients around the Asia-pacific region.
It can be recalled that UBS issued $50 million in tokenized fixed-rate notes in December 2022 under English and Swiss law. It had a tenor of six months and was tokenized on an Ethereum-based blockchain. With that, UBS explained that the decision was meant to meet the rising demand for fixed-income investment among Asian investors.
The bank also stated that it would explore further transactions including for third parties. This was to maintain the growing digital security deals. Also, the inaugural senior unsecured digital bond of UBS was priced in November 2022. This comprised $404 million in three-year digital bonds.
This milestone also indicates an ongoing partnership between BOCI and UBS, and by this development, both entities have commenced a journey in terms of applicable laws and blockchain type.
Ms Ying Wang, Deputy CEO at BOCI commented on this milestone.
BOCI is very pleased to be at the forefront of innovation in technology finance and digital finance. Working together with UBS, we are driving the simplification of digital asset markets and products for customers in Asia Pacific through the development of blockchain-based digital structured products, designed specifically for customers in Asia Pacific. We are encouraged by the evolution of Hong Kong’s digital economy and are committed to promoting the digital transformation and innovative development of Hong Kong’s financial industry.
BOCI and UBS Working to Expand Tokenized Services
It is important to note that this transaction is the first of its kind in Asia-Pacific. Interestingly, BOCI is known for its groundbreaking innovative products. It was the first Chinese financial institution to issue structured notes overseas.
Even now, it is very dominant in the financial space within the region with a large volume of issuance and complete services to clients. The company is reportedly still working to expand its tokenization services through the UBS Tokenize.
Aurelian Troendle, Global Head of MTN Trading at UBS AG has also disclosed that the collaboration with BOCI is to bring structured products onto a public blockchain.
We are pleased to work with BOCI on this transaction to bring structured products onto a public blockchain network, supporting our APAC clients’ increasing interest in fully regulated digital asset products. High-frequency issuance activity can benefit from vast efficiency gains through the use of blockchain technology, which will ultimately bring advantages to investors. UBS is excited to work with issuers like BOCI to broaden our client offering through our tokenization capabilities.
UBS has currently established its presence in all financial centers globally with offices in more than 50 regions and locations. Its employees are also scattered across the globe with 30 percent working in the Americas, 31 percent in Switzerland, 19 percent in other European countries, the middle east and Africa, and 20 percent in the Asia Pacific.
