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Bank of China subsidiary BOCI and UBS have taken a bold step to offer the first tokenized security on the Ethereum blockchain.
The tokenized notes, totaling CNH 200 million in fully digital structured notes, have been issued to clients in Hong Kong.
The transaction is the first product in the Asia Pacific, defined under Hong Kong and Swiss law.
Bank of China has joined hands with Swiss Bank UBS in what has marked a new foray into the digital asset space, offering the first tokenized security on the Ethereum blockchain. Citing Deputy CEO at BOCI, Ms. Ying Wang:
BOCI is very pleased to be at the forefront of innovation in technology finance and digital finance working together with UBS.
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BOCI, short for BOC International Holdings Limited and the fully owned subsidiary of Bank of China (BOC), has collaborated with Switzerland Bank, UBS, to unleash the first tokenized security on the most popular blockchain in the crypto ecosystem.
According to BOCI’s Wang, the collaboration will see the partners demystify digital asset markets and products. This will be for the good of customers across the Asia Pacific, delivered through blockchain-based digital structured products, and tailored specifically for the customer base within the region.
Further, Wang noted that the growth of Hong Kong’s digital economy has greatly inspired the move, which reinvigorates the stakeholders’ commitment to promoting the digital transformation and innovative development of the city’s financial industry.
BOCI has earned a reputation for offering investment banking and securities brokerage services. The opening paragraph in the Swiss Bank’s official announcement reads:
BOCI has successfully issued CNH 200 million fully digital structured notes, making it the first Chinese financial institution to issue a tokenized security in Hong Kong.
It is imperative to note that the product is the brainchild of UBS, which then moved to introduce it to its Asia Pacific clientele, marking the onset of a BOCI-UBS association in the digital structured notes space. The move comes after the Switzerland-based financial institution issued a USD 50 million tokenized fixed rate note in December, digitized on permission blockchain and forged around English and Swiss law.
UBS says issuing digital securities marks the first step for the two parties “in terms of applicable law and blockchain types.” For ease of understanding, the transaction constitutes the first product of its kind in Asia Pacific as denoted under Hong Kong and Swiss law and tokenized on the main Ethereum (ETH) blockchain.
More importantly, it marks the first successful introduction of regulated securities onto a public blockchain.
BOCI has leveraged this move to foster its service to customers through innovation. Specifically, the Bank of China boasts extensive experience serving different types of customers through product innovation. This reinforces its position as the BOC Group’s international investment banking institution.
Noteworthy, BOC International Holdings Limited was the pioneer Chinese financial institution to issue structured notes across the borders of China. It boasts a full suite of products, an expansive issuance, and reliable services to its customer base.
Besides BOCI, UBS is committed to expanding its tokenization services across structured products, fixed income, and repo financing and uses the UBS Tokenize product to do so. Commenting on the collaboration, Global Head of MTN Trading at UBS AG Aurelian Troendle, said:
We are pleased to work with BOCI on this transaction to bring structured products onto a public blockchain network, supporting our APAC clients’ increasing interest in fully regulated digital asset products.
In line with expert assertions, increased efficiency enabled by blockchain technology could be an enabler of frequent issuance activity. This, according to Troendle, would benefit investors in the long run.
The two entities will work together as part of their shared vision to expand their client offering, BOCI, through tokenization capabilities.
Also Read: Swiss Bankers Association proposes deposit tokens to develop digital economy
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