China Construction Bank, the world’s second largest bank by assets, is working with partners from Malaysia and Singapore to test blockchain technology for use in the bond market.
As previously reported, the China Construction Bank branch in Labuan, Malaysia initially sought to partner with a Labuan-based fintech company to issue the first blockchain-based digital security from a financial institution. China.
CCB Labuan’s plan had been to issue bonds using the Ethereum blockchain, raising a total of up to $ 3 billion, starting with a $ 58 million tranche, from both individuals and institutions.
However, within a few days of the announcement, the bond issue was delayed until further notice, and trading in the first tranche in the form of token certificates of deposit was discontinued on the Labuan-regulated Fusang exchange.
December 3rd A new announcement suggested that work on the blockchain-based issuance has not stopped entirely, but that some of the key players have changed. The Malaysian National Stock Exchange, Bursa Malaysia and Labuan Financial Exchange are now involved, and there is no mention of the Fusang Stock Exchange.
Fusang has been remarkably supportive of cryptocurrency trading, so it was hoped that traders could exchange Bitcoin (BTC) for US dollars in order to buy the bonds.
Instead of the Ethereum blockchain, a proof-of-concept for the bond is currently being examined with STACS, a Singapore fintech development company that specializes in the use of blockchain technology in the capital markets. STAC has developed a blockchain-based platform called Trident and has received a grant from the Monetary Authority of Singapore for innovation and technology proof-of-concept for the financial sector.
In addition to CCB Labuan and Bursa Malaysia, other Proof of Concept partners include the national regulatory authorities, the Labuan Financial Services Authority and the Malaysian Securities Commission, as well as two banks, the CIMB Investment Bank Berhad and the Maybank Investment Bank Berhad known as Maybank. According to the announcement:
“The usage of […] Bonus templates […] Trident was reflected in smart contracts for rapid implementation, while operational workflows were streamlined to increase the efficiency and flexibility of settlement cycles. Together with CCB Labuan, CIMB and Maybank, the [prueba de concepto] simulated various bond issues that were issued and managed in the STACS blockchain. “
Those involved claim that this successful collaboration between fintech firms, banks, and private sector regulators shows the greater efficiency and transparency that blockchain technology can bring to the bond market.. The joint development of the technology is being prepared for the next project phases.