Chinese Bank Withdraws Plans to Issue $3 Billion Blockchain Bond
Two weeks ago, China’s second-largest bank, the Chinese Construction Bank (CCB), announced plans to sell $3 billion worth of debt using the blockchain.
The deal to issue the debt on a blockchain, featuring Hong Kong financial tech firm Fusang would have been the first digital bond issue by a Chinese Bank using the blockchain technology.
Fusang is a Hong Kong digital exchange licensed by Labuan’s financial regulator, Malaysia. According to the announcement, the offering would allow clients to purchase via cash and bitcoin on Fusang.
CCB Withdraws Offering
Speculation was that the move would expose more institutional investors to bitcoin while driving blockchain to the mainstream. However, the plan was cut short as reports today revealed that the offering had been withdrawn at the issuer’s request.
Henry Chong, Chief Executive at Fusang, had earlier stated that trading of bonds would begin on November 13. However, Fusang revealed on Monday that the bond listed CCB had been due for trading but was postponed after receiving a letter barely 48 hours from the CCB Labuan on behalf of Longbond Ltd.
Longbond is the financial arm of the CCB. The firm was specially created for issuing digital bonds and deposit the proceeds with the bank’s branch in Labuan, an offshore financial institution in Malaysia. The initial report on the development revealed that Longbond would issue the $3 billion bond.
No Reason Given
After the postponement, Fusang said CCB Labuan informed them on November 20 that they would not proceed with the bond issuance. According to FUSANG Chief Executive Henry Chong, the bank did give reasons for the withdrawal.
Meanwhile, the bank denied media reports earlier this month, stating that CCB Labuan was not the bond issuer and that the brand did not accept Bitcoin.