Bank of China Makes Landmark Move with $28M Digital Structured Notes on Ethereum Blockchain

Bank of China’s investment bank subsidiary, BOCI, has announced the issuance of 200 million Chinese yuan ($28 million) worth of digital structured notes on the Ethereum blockchain. This move marks BOCI as the first Chinese financial institution to issue a tokenized security in Hong Kong. The product was originated by investment banking company UBS, which facilitated its placement for clients in the Asia-Pacific region. UBS has been actively expanding its tokenization efforts across various financial products.

Ying Wang, the deputy CEO of BOCI, expressed the aim of simplifying digital asset markets and products for customers in the Asia-Pacific region through the development of Ethereum blockchain-based digital structured products. The collaboration between BOCI and UBS demonstrates a joint effort to leverage blockchain technology in the financial sector.

In recent months, Hong Kong has shown a growing interest in embracing cryptocurrencies and Ethereum blockchain technology. The region opened up crypto exchange access for retail users on June 1, and the government has expressed its active participation in the blockchain industry. Hong Kong is also working towards establishing a regulatory framework for stablecoins within the next year.

This issuance follows Hong Kong’s previous ventures into blockchain-based financial instruments. In February, the region issued an HK$800 million green bond tokenized on Goldman Sachs’ protocol. Additionally, in December 2022, Hong Kong introduced two exchange-traded funds for cryptocurrency futures. It is raising over $70 million prior to its launch.

By adopting blockchain technology for the issuance of digital structured notes. Bank of China and UBS are embracing the potential of distributed ledger technology to streamline and enhance traditional financial processes. The successful implementation of this tokenized security issuance may pave the way for further adoption of blockchain-based financial instruments in the Asia-Pacific region and beyond.