Chinese Bank To Sell $3 Billion In Debt Using Blockchain Technology
The world’s second-largest bank in china turns to Bitcoin and uses Blockchain technology to raise capital aimed at selling off $3 Billion in debt.
In a recently released article by the South China Morning Post, the world’s second-largest bank, China Construction Bank, collaborated with Fusang, a Hong Kong-based firm. Fusang confirmed the partnership on its official website, fusang.co. This business partnership aims to eventually sell off a total of $3Billion in debt through Blockchain Technology. The debt will be made available through several quotas in the form of digital certificates.
The first tranche would be worth $58million, and the base value of its certification is pegged as low as $100 monthly with a maturity rate of 0.75%. This is relatively higher than the average annual interest of 0.25%. The principal officer of CCB’s Labuan Branch, Felix Feng Qi, has also noted that this partnership aims to narrow the divide between fintech and the wider financial markets.
Chinese bank to use blockchain technology despite government stance
This is shocking as China is known for its cruel stance on Bitcoin and Blockchain technology. Surprisingly, this has not stopped its Banks from taking advantage of Bitcoin and Blockchain technology. Although China’s deposit insurance scheme does not cover these certificates, they will be made available to professional investors, banks, and retail investors who will all be able to buy them in small amounts. This is because the certificates are expected to be tokenized. Investors can trade these certificates on the Fusang Exchange, a crypto exchange company licensed by financial regulators in Labuan, Malaysia, using Bitcoin. The U.S. dollar has also been licensed to trade the bonds.
The Fusang Exchange CEO, Henry Chong, in a statement released, has also noted that he believes that this will be the start of crypto 2.0. He anticipates this collaboration as the perfect showcase for how digital securities can power financial inclusion by incorporating the exasperating developments in Blockchain Technology with traditional securities’ tokenization. He further stated that this is the real institutionalization of digital asset products.
Chinese bank to introduce new services based on investors interest
Furthermore, in its forethought, the bank aims to introduce more services similar to these certificates in the future. However, this development is subject to how much investors’ interest in this partnership attracts. In the future, the CCB, in collaboration with the Fusang Exchange, wants to issue similar certificates using other currencies, such as the Chinese Yuan.
Cryptocurrency giant Bitcoin has had a wild week itself, having seen it trade at $16,100 earlier this week and currently trade at $17,585 today, which shows a 9% increment in 3days. The news of this merger has also been welcomed with excitement, particularly amongst the crypto community with a popular tweep Lark Davis, also know as @TheCryptoLark, tweeting, “The world’s second-biggest bank is selling 3 billion dollars worth of bonds in exchange for #bitcoin!!! Unreal man…”.