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China Construction Bank to sell $3 bn worth of blockchain-based debt

The bank will issue the certificate of deposits for three months through its Labuan branch

China Construction Bank will sell its blockchain-based debt worth $3 billion. The bank will partner with Fusang, a Hong Kong-based fintech company for the development. It is reported that the debt will be cleared in the form of bonds. Furthermore, the bonds will be sold in the form of certificates of deposit. Each bond is usually sold at thousands of ¥. The bonds are used to carry out activities such as interbank funding among small and medium Chinese banks.

The development will pave the path for retail investors to acquire digital certificates by tokenising certificates of deposit on the blockchain. The bank will issue the certificate of deposits for three months through its Labuan branch. The issuance fees will be $10 for each certificate and customers will get 0.75 percent at maturity, higher than most of the banks.

The bank’s principal officer of the Labuan branch, Felix Feng Qi, told the media, “The issuance serves to narrow the divide between fintech and the wider financial markets.”

Investors will now be able to trade the bank’s certificates on the Fusang exchange through bitcoin. Fusang is a digital exchange licenced by the Labuan-based financial regulator in Singapore. The bond trading can also be carried out in USD.

Henry Chong, chief executive at Fusang, told the media, “If this transaction is a hit with investors, Fusang hopes to work with the state-owned bank on issuance in other currencies.” The new development expects to bolster the bank’s sustainability and growth for the future amid the pandemic.

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