Days after media outlets from all over the world reported that the Labuan branch of the China Construction Bank (CCB) had issued the nation’s first-ever blockchain-powered RMB bonds, the bank in question has moved to deny the veracity of the reports, adding that it has no links with “cryptocurrencies including bitcoin.”
Although the bank does not deny the existence of the bonds, or its connection with their issuance, it was keen to point out that it is merely the “lead arranger” and “lead advisor” on the project, with the actual issuance taking place via a company named Longbond, and tradeable on the Fusang Exchange.
The bank’s Labuan branch made the announcement on its CCB Malaysia website, stating,
“The branch is NOT the issuer of the bond. […] The branch does NOT accept cryptocurrencies including bitcoin for settlement in any of its banking transactions.”
Labuan is a tax haven island in Malaysia.
The issuance – due to take place as of today – has made headlines across the world. And bond-buyers will indeed be able to purchase bonds of USD 100 and upwards, using USD or BTC – only not via the bank itself, but rather the exchange it has partnered with. A total program target size of USD 3bn.
But news outlets across the world – including many in China – had, the bank appeared to infer, mistakenly reported that the CCB itself was the issuer.
These included the likes of the Financial Times, which ran with the headline: “China Construction Bank to issue offshore bond based on blockchain.”
Per a November 11 release from Fusang, Longbond is a public limited company and “a securitization Special Purpose Vehicle set up with the sole purpose of issuing digital bonds and depositing the proceeds with CCB Labuan.” The exchange added that CCB Labuan would act as the “listing sponsor for the deal.”
The announcement did not specify by whom Longbond was set up. Cryptonews.com has contacted CCB for comment.
The impassioned nature of the CCB denial appears to indicate that while fervor for all things cryptocurrency-related remains sky-high in China, banks and other major businesses are still fearful of invoking the wrath of Beijing – which enacted an almost total crypto crackdown in September 2017 and is now working on its digital yuan.
World Bank Blockchain Bond “Exceeds Expectations”
Chinese Central Bank Issues USD 2.8m Worth of Blockchain Bonds
French Giant SocGen Chose Ethereum for its Digital Token Experiment