Bank of Communications Hong Kong launches a US$300 million digital bond
Bank of Communications Hong Kong Issues $300 Million Digital Bond
Bank of Communications (BoCom) Hong Kong has made history by issuing a $300 million digital bond with a three-year term. This groundbreaking move is being facilitated by the HSBC Orion digital asset platform, a privately permissioned blockchain.
The digital bond, which is potentially the first digitally native bond for a Chinese bank, is an unconditional, unsubordinated, and unsecured obligation of BoCom Hong Kong. Moody's, a leading credit rating agency, has given the digital bond issuance a preliminary A2 rating, the same as similar conventional issuances and BoCom's long-term deposit rating.
Moody's believes specific risks from using blockchain have been mitigated for this digital bond issuance. Despite its negative outlook on China's sovereign rating, Moody's has confirmed that the rating of the digital bond issuance is not affected.
The Hong Kong central securities depository, CMU, is being used to clear the digital bond issuance. Integrated with HSBC Orion, the CMU holds an off-chain backup record of beneficial owners, acting as the definitive legal record for the digital bond issuance.
For the initial settlement and coupon payments, the cash transactions for the digital bond are taking place off-chain. This move aims to ensure smooth and secure transactions while maintaining the traditional banking system's stability.
The issuance of the digital bond is a significant step forward in the digitalisation of the financial industry. It demonstrates the potential of blockchain technology in facilitating secure and efficient financial transactions.
Despite the CEO of Bank of Communications Hong Kong not being explicitly named in the available search results, the successful issuance of the digital bond marks a significant achievement for the bank and the wider financial industry.
As the details of the digital bond issuance continue to unfold, it is clear that this move represents a significant step towards a more digitally-focused financial future. The successful issuance of the digital bond by BoCom Hong Kong is a testament to the potential of blockchain technology and the digitalisation of the financial industry.
