Hua Xia Financial Leasing, a subsidiary of Hua Xia Bank, has issued a RMB 4.5 billion ($636m) digital bond which was settled using China’s pilot CBDC, the digital RMB. This ranks among the largest digital bond issuances globally, and the largest by a private entity. By comparison, in November the Hong Kong government issued a HKD 10 billion ($1.29 billion) digital bond, the largest issuance to date.
The announcement emphasized that distributed ledger technology was used for the book building. While the bond may be blockchain-based, China’s CBDC is not blockchain-based. However, centralized smart contract framework was launched in 2022 to layer automation on top of the core digital RMB infrastructure.
The initial planned issuance of the three year 1.84% bond was for RMB 3 billion, but the over allotment triggered the larger amount. While Hua Xia Bank may not be a big name outside of China, it is China’s 14th largest bank and ranks 59th globally based on assets according to S&P Global. That’s one spot ahead of Germany’s Commerzbank.
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