Chinese banking giant issues $3B of bonds that can be bought with Bitcoin

The world’s second-largest bank has unveiled plans to raise $3 billion by selling bonds based on the blockchain in a world first.

Announcing the digital bond on Nov. 11, China Construction Bank said investors will be able to purchase these debt securities using Bitcoin or U.S. dollars.

According to CCB, the bond will offer returns that are considerably higher than the interest rates currently available on the market—and it will be backed by the bank’s balance sheet.

“The issuance serves to narrow the divide between fintech and the wider financial markets,” CCB’s principal officer Felix Feng Qi said.

Bond holders will be able to trade these securities prior to maturity through the Fusang exchange. This platform says it is Asia’s first fully licensed stock exchange to focus solely on digital assets—all while adhering to the same regulations as traditional securities exchanges.

Opening doors

For CCB, another significant milestone that’s linked with the digital bond offering is how “retail and sophisticated investors globally will have direct access through the Fusang exchange with investment amounts of as little as $100.”

The institution’s news release added: “Unlike many other investments available to retail investors, this landmark offering will undoubtedly bring legitimacy and investor confidence to the world of cryptocurrency and decentralized finance, which is wrought with lawsuits and concerns surrounding investor protection.”

This sentiment was echoed by Henry Chong, the CEO of the Fusang exchange, who said everyday investors will now be able to benefit from “an investment previously reserved for only the largest institutions, together with low and transparent fees.”

It is hoped that the digital bond issuance will show how blockchain can power financial inclusion, provide a blueprint for the tokenization of traditional securities, and herald “the start of Crypto 2.0—the true institutionalization of digital asset products.”

CCB is not alone in issuing bonds on the blockchain. On October 5, the Bank of Thailand announced that a blockchain-based platform built by IBM had sold $1.6 billion in tokenized government savings bonds since going live on Sept. 11.

“Bank of Thailand’s success with the government savings bond project is the latest example of how blockchain technology can redefine the way businesses operate by simplifying complex processes,” said IBM Thailand Managing Director Patama Chantaruck at the time. He added that this results “in fast, transparent, secured and efficient multiparty collaboration.”