June 13, 2024
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Bank of China’s investment bank BOCI has issued 200 million yuan (US$28 million) fully digital structured notes, making it the first Chinese financial institution to issue a tokenized security in Hong Kong.

The product was originated by UBS and placed to its clients in Asia-Pacific, marking a long-term collaboration between BOCI and UBS on digital structured notes.

UBS had issued a US$50 million tokenized fixed-rate note in December 2022 under English and Swiss laws, digitized on an authorized blockchain.

The transaction marks the first product of its kind in Asia-Pacific that is constituted under Hong Kong and Swiss laws and tokenized on the main Ethereum blockchain.

Ying Wang, deputy chief executive officer at BOCI, comments: “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. We are encouraged by the evolution of Hong Kong’s digital economy and are committed to promoting the digital transformation and innovative development of Hong Kong’s financial industry.”

Aurelian Troendle, global head of MTN Trading at UBS, says there is a growing interest among its clients in Asia-Pacific in fully regulated digital asset products. “High-frequency issuance activity can benefit from vast efficiency gains through the use of blockchain technology, which will ultimately bring advantages to investors,” Troendle notes.

The issuance of the tokenized structured notes is a significant milestone for the development of the digital asset market in Hong Kong and Asia-Pacific. It demonstrates the growing interest in digital assets among institutional investors and the willingness of financial institutions to innovate and offer new products and services to meet this demand.

The transaction is also a sign of the growing importance of Hong Kong as a center for the development of digital assets. The city has a number of advantages that make it an attractive place for this industry, including a strong regulatory framework, a deep pool of talent, and a vibrant financial ecosystem.

The issuance of the tokenized structured notes is a positive development for the digital asset market in Hong Kong and Asia-Pacific. It is a sign of the growing interest in digital assets among institutional investors and the willingness of financial institutions to innovate and offer new products and services to meet this demand. The transaction is also a sign of the growing importance of Hong Kong as a center for the development of digital assets.

James Andersen
Financial Desk

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