Chinese bank BOCI issues tokenized structured product with UBS

BOCI, investment banking owned by Bank of Chinain partnership with the Swiss UBS an structured product in format security token on Ethereum. A first for a chinese financial institution à Hong Kong.

La China is regularly making headlines in the field of central bank digital currencies (CBDCs). Its central bank and the country’s financial institutions are not, however, neglecting the subject of tokenization of financial assets.

The BOCIan investment bank owned by Bank of Chinaannounced the issue of a structured product in format security token in the amount of CNH 200 million – the Yuan used outside mainland China – or around 25 million euros.

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Tokenized product created by UBS

The bank claims to be the first Chinese financial player to issue a tokenized security at Hong Kong. For this operation, the BOCI has joined forces with UBS. The Swiss bank was behind the creation of the structured product – subsequently placed with its Asia-Pacific clients.

The two partners announce their intention to work together on a long-term basis in the field of structured products. digital structured bonds. And for their first transaction, BOCI and UBS are thus bringing together Hong Kong and Swiss legislation on tokenization.

This CNH 200 million structured note was issued on the Ethereum blockchain. The operation therefore involved introducing regulated securities on a public blockchain.

Development of digital structured products

In collaboration with UBS, we are promoting the simplification of digital asset markets and products, for Asia-Pacific customers, through the development of blockchain-based digital structured products designed specifically for Asia-Pacific customers,” emphasizes BOCI Deputy CEO Ying Wang.

For UBS, this latest transaction reflects the bank’s commitment to developing its tokenization services. ThroughUBS Tokenizethe company already offers structured products, fixed-income securities and repo financing.

The high-frequency issuance business can benefit from vast efficiency gains through the use of blockchain technology, which will ultimately bring benefits to investors,” says Aurelian Troendle, Global Head of MTN Trading for UBS AG.

A double-listed UBS bond in 2022

Last November, UBS was already claiming a world first. At the time, the bank launched a 380 million euro digital bond that could be traded and settled on both the blockchain and a traditional exchange.

The world’s first benchmark public bond that investors can access on both digital and traditional markets,” UBS insisted.

The product was listed simultaneously on SDX and SIX Swiss Exchange. Thanks to this financial instrument, UBS believes it can remove some of the obstacles to the digitization of finance, while improving the bond issuance process, which is deemed “simpler and more efficient”.

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