Singapore’s second largest bank, OCBC, has introduced a new blockchain based solution for corporates seeking to diversify their treasury assets. They are offering custom tokenization of corporate bonds, selling the bonds to accredited corporate clients with assets of more than S$10 million. Instead of requiring a minimum investment of S$250,000, the units can be as little as S$1,000. Additionally, the investor can specify the desired duration and coupon. The tokens reference existing investment grade bonds.
OCBC touted the advantage as reducing the concentration in bond holdings, from the issuer perspective. For investors it means they can liquidate small denominations if they wish to use the funds for corporate purposes. OCBC’s investor for the solution was a mid-sized construction firm looking to diversify its treasury holdings away from fixed deposits. Settlement was the same day as opposed to the usual five days.
While OCBC may be the first Singapore bank to offer the bespoke tokenization solution, Citi-backed BondbloX has been fractionalizing bonds in Singapore for a few years.
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