BOCI Issuing $28 Million in Digital Structured Notes on Blockchain

• BOCI becomes the first Chinese bank to issue tokenized securities.

• It is also the first of its kind in the Asia-Pacific.

Bank of China’s subsidiary, BOCI, is making history after becoming the first Chinese financial institution to issue tokenized securities in Hong Kong. according to reportBOCI has issued CNH 200 million ($28 million) in digital structured notes minted on the Ethereum blockchain. Interestingly, it was investment banking company UBS that originated the products and was awarded to its clients around the Asia-Pacific region.

It may be recalled that UBS issued $50 million in tokenized fixed-rate notes in December 2022 under English and Swiss law. It had a duration of six months and was tokenized on an Ethereum-based blockchain. With that, UBS explained that the decision was meant to meet the growing demand for fixed income investments among Asian investors.

The bank also stated that it would investigate additional transactions, including for third parties. This was to maintain the growing digital security agreements. Also, the first unsecured digital bond of UBS was priced in November 2022. This included $404 million in three-year digital bonds.

This milestone also indicates an ongoing partnership between BOCI and UBS, and with this development, both entities have embarked on a journey in terms of applicable laws and blockchain type.

Ying Wang, Deputy CEO of BOCI commented on this milestone.

BOCI is very pleased to be at the forefront of innovation in technology finance and digital finance. In collaboration with UBS, we drive the simplification of digital asset markets and products for clients in Asia Pacific through the development of blockchain-based digital structured products, designed specifically for clients in Asia Pacific. We are encouraged by the development 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 are working to expand tokenized services

It is important to note that this transaction is the first of its kind in the Asia-Pacific. Interestingly, BOCI is known for its cutting edge innovative products. It was the first Chinese financial institution to issue structured notes abroad.

Even now, it is very dominant in the financial area in the region with a large volume of issues and complete services to customers. The company is reportedly still working on expanding its tokenization services through UBS Tokenize.

Aurelian Troendle, Global Head of MTN Trading at UBS AG has also revealed that the collaboration with BOCI is to bring structured products into a public blockchain.

We are pleased to partner with BOCI on this transaction to bring structured products into a public blockchain network, and support our APAC customers’ growing interest in fully regulated digital asset products. High-frequency issuance activity can benefit from huge efficiency gains through the use of blockchain technology, which will ultimately benefit investors. UBS is excited to work with issuers like BOCI to expand our client offering through our tokenization capabilities.

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UBS has currently established its presence in all financial centers globally with offices in more than 50 regions and locations. The employees are also spread 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 Asia-Pacific.

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