China Construction Bank, which is one of the top four banks in China, recently launched digital bonds, which can be bought for Bitcoin. The bonds come with an annual yield of around 0.75%.
Details of the Digital Bonds
According to the China Construction Bank, the digital bonds are the first publicly listed bonds on the blockchain. Investors will be able to buy them for Bitcoin as well as the US dollar, according to a Wall Street Journal report.
According to the report, the bonds come with an annual yield of around 0.75%, and they will be rolled out every three months. It is similar to the existing process via which securities are closed and fresh loans placed in the new ones.
The China Construction Bank’s offshore branch that is located in Labuan, the Malaysian financial center, Will facilitate the offering. These bonds will be listed on the Fusang Exchange, which supported crypto and fiat trading.
According to Felix Feng Qi, the principal office of the bank’s Malaysian operations, the new offering will be “the first publicly listed debt security on a blockchain.” The CEO of the Fusang Exchange, Henry Chong, added that the bonds would work in the same way as bank deposits. However, they would offer higher yields than most USD deposits.
According to Steven Wong, the China Construction Bank’s Malaysian operations chief operating, and financial strategies, they were not dealing in Bitcoin or crypto. He emphasized that from their perspective, they were taking bank deposits, which was their core business.
Who Can Invest?
The digital bonds will be available to investors from the world over except for Chinese and US-based tax residents. Additionally, the bonds will not be available to residents of North Korea and Iran. The bank expects to attract $3 billion worth of sales from the offering.
The digital bonds launch on November 11, 2020, and trading is expected to start on Friday, November 13, 2020. It is not the first time blockchain-based digital bonds are being sold in South East Asia. On October 5, 2020, the Bank of Thailand sold blockchain-based government savings bonds worth $1.6 billion, just a week after their launch.