By Staff Writer
Recently, the Bank of China (BoC) completed the issuance of 20bn yuan ($2.8 bn) worth of bonds using its proprietary blockchain system, according to Chinese-language media Sina Finance.
The state-owned bank, the fourth-largest commercial bank in China, will use the proceeds to provide finance to small and micro-enterprises.
The blockchain system developed by BoC includes functions such as bond creation, bookkeeping, underwriting, network management, bond purchase, order summary, pricing and placement.
The bond issuance is part of an initiative to boost the Chinese economy by supporting micro and small businesses (MSEs). It comes on the heels of the government’s decision to ease monetary policy to help small and medium businesses. China’s total outstanding loans for small enterprises surged to the highest level in Asia in May, at 10.3 trillion yuan ($1.5 trillion), a 21% increase from a year earlier, reported China Daily.
Blockchain for bond issuance has been piloted elsewhere. The World Bank’s bond-i, managed by Commonwealth Bank of Australia, has raised a total of $108 million to date while Spanish bank BBVA has arranged different types of loans using blockchain.
A few months ago, Banco Santander issued a tokenized $20mn worth of bonds on the Ethereum blockchain.
HSBC Singapore is working with Singapore Exchange and state-owned Temasek to trial blockchain for the Asian bond market while the Thai government is also running a pilot for bond issuance.
