.png)
Bank of China's investment bank subsidiary, BOCI, has issued the first tokenized security in Hong Kong. The digital structured notes, worth 200 million Chinese yuan ($28 million), were minted on the Ethereum blockchain.
BOCI worked with investment banking company UBS to originate the product and place it with clients in the Asia-Pacific region. Ying Wang, the deputy CEO of BOCI, said:
"Working together with UBS, we are driving the simplification of digital asset markets and products, for customers in Asia Pacific through the development of blockchain-based digital structured products, designed specifically for customers in Asia Pacific."
UBS has been expanding its tokenization efforts across structured products, fixed income and repo financing. In December 2022, the firm issued a $50 million tokenized fixed-rate note under English and Swiss law, digitized on a permissioned blockchain. The issuance of BOCI's digital structured notes is a significant development for the blockchain industry in Hong Kong. It follows the opening of crypto exchange access for retail users on June 1 and the government's announcement that it is "actively participating" in the blockchain industry and aims to establish a framework for stablecoin regulation within one year.
In February 2023, Hong Kong issued an HK$800 million green bond tokenized on Goldman Sachs' tokenization protocol GS DAP with an annual yield of 4.05%. In December 2022, Hong Kong introduced two exchange-traded funds for cryptocurrency futures, raising over $70 million before their launch. The growing interest in blockchain technology and digital assets in Hong Kong is a positive sign for the industry. It suggests that regulators are open to innovation and that there is a strong demand for these products from investors.
What does this mean for the future of blockchain in Hong Kong?
The issuance of BOCI's digital structured notes is a major milestone for the blockchain industry in Hong Kong. It shows that the city is open to innovation and that there is a strong demand for these products from investors. The government's stated intention to establish a framework for stablecoin regulation within one year is also positive news. This will provide much-needed clarity for the industry and will help to attract further investment.
Overall, the future of blockchain in Hong Kong looks bright. The city has a strong track record of innovation and is home to a number of leading financial institutions. With the right regulatory framework in place, Hong Kong could become a major hub for blockchain-based businesses.
