Singapore’s OCBC Bank has introduced a groundbreaking blockchain-based solution that allows corporate clients to invest in fractionalized tokenized bonds, revolutionizing corporate treasury management practices.
Accredited investors of the bank, which are entities with assets exceeding S$10 million ($7.3 million), can now purchase bond units starting from as low as S$1,000. This is a significant decrease from the traditional minimum investment amount of S$250,000, as reported by Ledger Insights.
The innovative solution also offers investors the flexibility to customize bond duration and coupon rates. These tokenized bonds are backed by existing investment-grade assets, providing corporate clients with more tailored and liquid investment opportunities.
For example, a mid-sized construction company recently leveraged this service to diversify its treasury holdings beyond fixed deposits, according to Ledger Insights.
Settlement times have been notably enhanced, with transactions now being completed within just one day compared to the usual five days.
This initiative builds upon OCBC’s previous blockchain ventures. In 2023, the bank collaborated with ADDX for structured product issuances and introduced a blockchain-based conditional payment solution. This system facilitated automated disbursements for the Land Transport Authority, processing over S$22 million in payments by late 2024.
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Global banks and tokenization
Global banks are increasingly exploring tokenization for financial transactions. Last autumn, the Reserve Bank of Australia initiated a consultation on Project Acacia, a three-year endeavor exploring wholesale central bank digital currency and tokenized asset markets.
The project aimed to gather public feedback on the potential advantages of tokenizing assets and utilizing CBDCs for settlement purposes.
Moreover, in June 2024, Germany’s state-owned bank, Kreditanstalt für Wiederaufbau, embraced blockchain technology by issuing its inaugural digital bond.
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