China Construction Bank, the world’s second largest bank by assets, is working with Malaysian and Singaporean partners to test blockchain technology for use in the bond market.
As previously reported, the China Construction Bank branch in Labuan, Malaysia, had initially pursued a partnership with a Labuan-based fintech to release what was praised in the future. the very first blockchain-based digital security issued by a Chinese financial institution.
CCB Labuan’s plan was to use the Ethereum blockchain to issue bonds and raise a total of up to $ 3 billion, starting with a tranche of $ 58 million, from both individuals and institutions.
Within days of the announcement, the bond was issued postponed until further noticeand trading of the first tranche, in the form of tokenized certificates of deposit, fell through on the Labuan-regulated Fusang Exchange.
There will be a new one on December 3 Announcement suggested that work on the blockchain-based issuance has not been completely suspended, but some of the key actors have changed. The National Stock Exchange of Malaysia, Bursa Malaysia and the Labuan Financial Exchange are both now involved, and no mention of Fusang Exchange has been made.
Fusang notably supports cryptocurrency trading, so traders were expected to use Bitcoin (BTC) for US dollars to buy the bonds.
In place of the Ethereum blockchain, a proof-of-concept for the bond is now being explored with STACS, a Singaporean fintech development firm specializing inhe uses blockchain technology in capital markets. STAC has developed a blockchain-based platform called Trident and has received a financial sector technology and innovation proof-of-concept grant from the Monetary Authority of Singapore.
In addition to CCB Labuan and Bursa Malaysia, other proof-of-concept partners include domestic regulators, the Labuan Financial Services Authority and Securities Commission of Malaysia, as well as two banks, CIMB Investment Bank Berhad and Maybank Investment Bank Berhad. . as Maybank. According to the announcement:
“Using […] Trident […] bond templates were mirrored on smart contracts for rapid implementation, while operational workflows were streamlined to increase efficiency and flexibility in settlement cycles. Together with CCB Labuan, CIMB and Maybank, the [proof-of-concept] simulated several bond issues all issued and managed on the STACS Blockchain. “
Those involved claim that this successful collaboration between fintech companies, banks and private sector regulators demonstrates the increased efficiency and transparency that blockchain technology can bring to the bond market. Further joint development of the technology for the next phases of the project is in the pipeline.