On June 12, BOCI, a subsidiary of Bank of China’s investment bank, announced that it would issue digital structured notes on the Ethereum blockchain valued at 200 million Chinese yuan ($28 million). With this move, BOCI becomes the first Chinese financial institution to issue tokenized securities in Hong Kong.
The notes were issued in partnership with UBS and BOCI and tokenized on the Ethereum network.
“By creating blockchain-based digital structured products designed for Asian consumers, we are advancing the simplicity of digital asset markets and products for clients in the region in collaboration with UBS. The rise of the digital economy in Hong Kong gives us hope, and we are dedicated to fostering the digital transformation and creative growth of Hong Kong’s financial sector,” stated Ying Wang, deputy CEO of BOCI.
UBS has been growing its tokenization across structured products, fixed income, and repo financing concurrently with this development. In December 2022, the company released a $50 million tokenized fixed-rate note that was digitalized on a permissioned blockchain and governed by English and Swiss law.
Paul Chan Mo-po, the finance secretary, earlier stated that Hong Kong will embrace regulation in its efforts to become a center for crypto.
“The virtual asset market has seen significant volatility, and many virtual asset exchanges have lately gone out of business, which has led some in society to raise concerns about the future of Web3. However, we think that now is the ideal time to make progress Web3,” he stated in a blog post.
This month, the special administrative area relaxed its prohibition on cryptocurrency retail trading and urged exchanges to apply for licenses in that region.
Several companies, including Huobi, OKX, and BitMEX, have stated their plans to seek a Hong Kong license since the Securities and Futures Commission released exchange rules.
After the SEC sued the exchange last week, Johnny Ng, a Hong Kong lawmaker, even extended an invitation to Coinbase to open a hub there.
Hong Kong launched two exchange-traded funds for cryptocurrency futures in December 2022 after raising more than $70 million for the venture.