20 Billion Yuan Issued by Bank of China in Blockchain-Based Bonds for Smaller Businesses
- The Bank of China is one of the four major commercial banks in China.
- In total, the bank has issued 404 billion yuan to almost half a million small businesses and enterprises in China.
There are four major commercial financial institutions in China, but the Bank of China is making some major moves in the blockchain industry. According to a recent article by CoinDesk, the bank recently issued 20 billion yuan ($2.8 billion) in blockchain-based bonds, dedicating it to small businesses that are working on their own blockchain platforms.
The announcement from the bank came on Friday, stating that the first period’s pricing and issuance of the bonds has been complete, coming to the market at a 3.25% coupon rate for the two-year bond.
The statement added, “We have used our own blockchain-based bond issuance system in the process. This is also the first bond issuance ledger system that is based on blockchain in the country.” The digital certificates prove the ownership by the small businesses of these bonds.
China continues to seek out opportunities to show their support for entrepreneurs, helping with their access to capital for their businesses. According to statistics from September, the Bank of China has already lent a total of 404 billion yuan ($57.7 billion) to hundreds of thousands of small businesses and enterprises.
The financing of these types of businesses has become one of the big use cases that blockchain technology has found in the Chinese economy.
The largest bank (by assets) in the world, the Industrial and Commerce Bank of China (ICBC) recently started offering factoring services in 2018 on their blockchain platform, targeting SMEs. Factoring services are transactions that involve the sale of account receivables at a discount for a third party, in exchange for receiving an immediate cash payment.
Ant Financial also recently announced their intention to launch a blockchain platform with reliable financial services to SMEs in the next three months.