World’s 2nd largest bank will issue $3 billion in bonds that can be bought with Bitcoin

  • Construction Bank of China will issue bonds with an estimated value of $3 billion that can be bought with Bitcoin.
  • Investors will be able to buy certificates of deposit of the bonds in small amounts of money, starting at $100 or 0.015 BTC.

In a press release, the Hong Kong-based exchange Fusang has announced a cooperation with the world’s second largest bank, the China Construction Bank (CCB). The cooperation aims to make a public offering of debt security on the blockchain. The CCB will issue an estimated $3 billion in bonds. Trading will begin on Friday, November 13, and the bonds will be purchasable with Bitcoin (BTC).

Moreover, the bonds will be issued through Longbond Ltd. under the name Longbond SR Notes (LBFEB21). Fusang claims that the product will be the first offering of a security product accessible to retail investors. The Principal Officer of the CCB, Felix Fend Qi, stated the following:

CCB Labuan is happy to play its role as lead arranger for the first publicly listed debt security on a blockchain. The issuance serves to narrow the divide between FinTech and the wider financial markets. CCB Labuan will continue to work on expanding the technological boundaries to provide value added products and services to our customers, clients, and associates.

Bitcoin (BTC) supports the first public digital debt security offering

The bond will give investors deposits insured by the banking institution with returns of 0.70% while the statement claims that the annualized interest rate at a bank is currently at 0.25%. Furthermore, the product will be part of an initiative by the regulatory authority of Labuan, Malaysia, to promote “a digital transformation”, as Fusang added:

With this digital bond, both retail and sophisticated investors globally will have direct access through the FUSANG Exchange with investment amounts of as little as USD 100. Investors will also be able to trade directly in/out of the bond using BTC. (…) this landmark offering will undoubtedly bring legitimacy and investor confidence to the world of cryptocurrency and decentralised finance (“DeFi”).

The exchange has introduced the blockchain technology to “enable financial inclusion”, reduce costs, and increase transaction efficiency. As a result, retail investors around the world will be able to access the product. Fusang CEO Henry Chong expressed his enthusiasm for the cooperation they have established with the CCB.

As stated by Chong, the success of the program will determine whether the exchange can expand the product with the CCB. Therefore, bonds accessible with other currencies could be launched. In that sense, Chong believes that the financial world is at a turning point:

Global investors can now benefit from access to an investment previously reserved for only the largest institutions. FUSANG is excited to partner with CCB on this landmark issuance. We think this is the perfect showcase for how digital securities can power financial inclusion, by combining the exciting advancements in blockchain technology with the tokenisation of traditional securities. We believe that this will be the start of crypto 2.0.

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