OCBC Offers Fractional Bond Tokens for Corporates Investors

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As a forward-thinking crypto investor, I’m thrilled about the latest move by Singapore’s second-largest financial institution, OCBC Bank. They’ve announced a groundbreaking solution that leverages blockchain technology, enabling corporate investors like myself to purchase fractional shares of their bonds. This innovative approach not only broadens investment opportunities but also makes it more accessible for a wider range of investors. I can’t wait to see how this evolves and what other financial institutions might follow suit.

Through tokenization, these newly-issued bonds are designed to attract investment from individuals towards private companies with a minimum earnings of S$10 million. As stated in the press release, potential investors now have the opportunity to buy bonds valued at S$1,000, whereas the minimum investment for traditional bonds stands at S$250,000.

Additionally, these bonds are tailored to match investors’ preferred terms (tenor and interest rates), enhancing both adaptability and security. Now, OCBC’s corporate clients have the option to adjust the makeup of their bond portfolios and even sell lesser quantities when immediate liquidity is needed.

Initially, this novel product was adopted by a mid-sized construction firm seeking to expand their investment portfolio beyond fixed deposits.

In contrast to conventional bonds, which often require a five-day settlement period, tokenized bonds offer an expedited settlement process happening on the same day. This swift transaction completion is among the primary advantages that set tokenized bonds apart.

In simpler terms, Kenneth Lai, who leads Global Markets at OCBC, stated that this new development offers flexible and quick investment options, delivering real advantages to our clients.

2022 saw the establishment of a tokenization platform by the bank, designed to facilitate the creation and distribution of bonds. These bonds were then deposited into investors’ digital wallets. Moving forward, OCBC aims to extend their services, incorporating various other forms of tokenized assets.

Beyond just focusing on tokenized bond development, OCBC Bank has additionally been delving into various ways of utilizing blockchain technology within its financial services. In the year 2024, the bank collaborated with Singapore’s Land Transport Authority (LTA) to create a conditional payment solution based on blockchain technology for construction projects. This system automatically dispenses payments once predefined conditions have been fulfilled.

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2025-01-07 20:05