Today Guotai Junan International (GTJAI) announced the issuance of a three year digital bond of up to US$300 million on the HSBC Orion blockchain infrastructure. The company is the Hong Kong subsidiary of State-backed Guotai Haitong Group, China’s largest securities brokerage. GTJAI also acted as lead underwriter for the issuance.
“Successfully issuing the first publicly offered digital bond of a Chinese brokerage firm is a testament to our unwavering commitment to financial innovation and a showcase of our professional capabilities in digital finance and contribution to promoting digital assets,” said Zhang Xueming, CFO of GTJAI. “This transaction not only enhances operational efficiency and transparency for our clients and investors but also solidifies GTJAI’s leadership in pioneering next-generation capital market solutions.”
Apart from efficiency and transparency, the brokerage cites other blockchain benefits including reducing costs and lower risks of settlement failures. Fractionalization is often considered a feature, but the bond’s $200,000 minimum transaction size is the same as many conventional bonds. In terms of its own costs, the issuance should be relatively inexpensive as Hong Kong is providing digital bond issuance grants.
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