- Bank of China’s subsidiary, BOCI, makes history by issuing digital structured notes worth $28 million on the Ethereum blockchain, becoming the first Chinese financial institution to issue a tokenized security in Hong Kong.
- UBS aids in the product’s creation, expanding its tokenization across structured products, fixed income, and repo financing.
As blockchain technology penetrates the banking sector, the Bank of China’s investment bank subsidiary, BOCI, has embarked on a historic move. On June 12, BOCI announced the issuance of digital structured notes worth 200 million Chinese yuan ($28 million) on the Ethereum blockchain. This marked the first instance of a Chinese financial institution issuing a tokenized security in Hong Kong.
UBS, the Swiss multinational investment bank, played a pivotal role in crafting the product for its Asia-Pacific clientele. Ying Wang, Deputy CEO of BOCI, shared his thoughts on this collaboration:
“In tandem with UBS, we’re simplifying the digital asset markets and products for our customers in the Asia Pacific. We’re achieving this through the development of blockchain-based digital structured products, tailored specifically for this region.”
In parallel with these developments, UBS has been broadening its tokenization in the realms of structured products, fixed income, and repo financing. In December 2022, UBS issued a $50 million tokenized fixed-rate note, governed by English and Swiss law, and digitized on a permissioned blockchain.
The news follows recent regulatory shifts in Hong Kong’s approach to digital currencies. On June 1, Hong Kong allowed retail users access to crypto exchanges. Less than a fortnight later, Joseph Chan Ho-lim, undersecretary for financial services and the treasury for the Hong Kong government, expressed that the special administrative region is “actively participating” in the blockchain industry and aims to establish a stablecoin regulation framework within a year.
Earlier this year, in February, Hong Kong issued an HK$800 million green bond, tokenized on Goldman Sachs’ GS DAP protocol, with a 4.05% annual yield. Moreover, in December 2022, Hong Kong launched two exchange-traded funds for cryptocurrency futures, amassing over $70 million prior to their debut.
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