Bank of China’s investment arm, BOCI, has taken a step towards simplifying digital asset markets and products for customers in the Asia-Pacific region. The bank has done so by becoming the first Chinese institution to issue $28 million worth of digital structured notes, tokenized on the main Ethereum blockchain network. The notes were initiated by UBS and distributed to clients in the Asia-Pacific region.
Blockchain Technology for High-Frequency Issuance
According to Aurelian Troendle, Global Head of MTN Trading at UBS AG, blockchain technology can help in producing vast efficiency gains for high-frequency issuance activity, which will ultimately benefit investors. UBS aims to expand its tokenization services across structured products, fixed income, and repo financing.
Bank of China International
Bank of China International (BOCI), a wholly-owned investment bank of the Bank of China, offers a comprehensive range of investment banking services to clients both domestically and overseas. It provides corporate finance, financial advisory, private banking, asset management, direct investment, equity derivatives, leveraged and structured finance, global commodities, and more. The bank has maintained a leading position in Hong Kong’s IPO, stock trading, bond issuance, and MPF markets and Chinese mainland capital markets for a long time.
Rise of CBDCs
Analysts at global investment bank Citi believe that CBDCs and the tokenization of real-world assets would drive the next wave of mass adoption of blockchain technology. The report titled “Money, Tokens, and Games: Blockchain’s Next Billion Users and Trillions in Value” estimated that globally more than $5 trillion of CBDCs could be circulating by the end of this decade, providing almost 2 billion people the opportunity to experiment with digital currency.
BOCI’s utilization of the Ethereum blockchain network to issue digital structured notes is a significant step towards simplifying digital asset markets and products for customers in the Asia-Pacific region. The bank has set a precedent for Chinese institutions to follow in the adoption of blockchain technology. As UBS aims to expand its tokenization services, the application of blockchain technology in the financial industry is likely to become more widespread. With the rise of CBDCs and the tokenization of real-world assets, the mass adoption of blockchain technology may not be far off.
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