While in the US the crypto sector is increasingly being pressured by the SEC, the third largest bank in China a step into the world of cryptocurrencies and tokenize securities on the Ethereum blockchain. The total value of the securities is 200 million yuan, which is about $28 million. The Bank of China (BOCI) is with it the first bank in China, which issues tokenized securities on a public blockchain. BOCI’s move comes as part of China’s push to make Hong Kong a major trading hub for virtual assets.
A major development for tokenized securities
A tokenized security is recorded on a distributed ledger rather than in traditional, computerized ledger entries. Big banks like Citigroup and Bank of America assume that tokenization of real world assets (RWA) could fuel cryptocurrency adoption and bring over $4 trillion in value to blockchain networks by 2030.
Hong Kong increasingly important for crypto
The Bank of China’s decision to issue securities on Ethereum underscores Hong Kong’s growing aspiration to become one of the hubs of the crypto economy. Hong Kong only legalized trading in cryptocurrencies for private investors in early June.
Additionally, Hong Kong lawmaker Johnny Ng invited Coinbase to settle in Hong Kong after the US exchange was sued by the SEC. Also, white paper of the Beijing Municipal Science and Technology Commission released on May 27 conclude that China is planning to further expand its presence on the Web3. Developments in Hong Kong suggest China is looking to capitalize on developments in the US.
The future of tokenized securities
Tokenized securities represent a significant advance in the way securities are issued and traded. They enable more efficient, transparent and secure trading that can transcend the limitations of the traditional financial system. The Bank of China’s decision to issue tokenized securities on the Ethereum blockchain is a clear sign that these types of digital assets could play an increasingly important role in the global financial system.
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