China Construction Bank has partnered with Hong Kong-based fintech company Fusang to launch the sale of $3 billion worth of debt on a blockchain, the first digital security issued by a Chinese bank on the technology, the South China Morning Post reported.
The bond will be sold in the form of certificates of deposit, which are usually sold at several tens of thousand yuan each and attract mainly professional investors or other banks. They are often used for interbank funding, specifically for small to medium-sized banks in China.
China Construction Bank’s certificates of deposit will be issued through its Labuan branch with a tenor of three months. Issued at a minimum of $100 each, the certificates will yield about 0.75% at maturity, higher than the roughly 0.25% interest rate per annum interest rates at banks.
The deal also allows investors to trade these China Construction Bank’s digital certificates using bitcoin, on Fusang Exchange, a digital exchange licensed by the financial regulator in Labuan, Malaysia. Trading of the bond can also be done in USD. Fusang hopes to work with the state-owned bank on issuance in other currencies, including yuan, said Henry Chong, chief executive at Fusang, cited by SCMP.