According to the Wall Street Journal report on November 11, 2020, China Construction Bank plans to cooperate with Labuan financial technology company Fusang to sell a digital bond through the Labuan branch of China Construction Bank Malaysia to raise no more than US$3 billion. According to media reports, this is the first domestic bank to issue USD bonds using digital tokens.
Specifically, the digital bond issued by China Construction Bank this time will be issued on Ethereum in the form of ERC20 tokens with a face value of $100, and the tokens will be listed on the Fusang Exchange.
With the help of blockchain technology, all individual and institutional investors except American and Chinese tax residents and Iranian and North Korean individuals and entities can buy and sell the bond with U.S. dollars and Bitcoin . Because the smallest trading unit is an ERC token, investors can become the owner of this bond with only $100, and get a return of 50 basis points (about 0.75%) higher than the Libor.
This article, a reporter from Golden Finance and Economics, took a look at the detailed information of the China Construction Bank’s $3 billion digital bond and Fusang Exchange.
3 billion USD digital bond details
According to the disclosed CCB bond issuance documents, the basic information of the bonds issued this time is as follows:
Issuer: Longbond Ltd. (Longbond Ltd. was established in September 2020 as a corporate entity-special purpose vehicle established for this bond issuance)
Promoter: Labuan Branch of China Construction Bank Corporation
Lead underwriter: Labuan Branch of China Construction Bank Corporation
Issuance scale: 3 billion US dollars
Plan duration: permanent
Distribution arrangement:
Redemption: early redemption is not supported
Guidance income: LIBOR plus 50 basis points (approximately 0.75% at current levels)
Form and face value: The bond forms are at the same time. The denomination of the bill is USD 100 or a multiple of USD 100.
List of bills: these bills will be listed on the Fusang exchange in the form of digital tokens and can only be traded on the Fusang exchange
Minimum subscription per issuance: USD 10 million
Maximum duration of each issue: up to 360 days
The first batch of ERC20 tokens
The official website of Fusang Exchange has announced the status of the first batch of digital bonds, and the corresponding ERC20 token status is as follows:
Total number of tokens issued: 140,000 (market value of 14 million US dollars)
Token contract address:
Full name of token: Longbond SR Notes USD Feb 2021
Token abbreviation: LBFEB21
Release Date: November 13, 2020
Expiry Date: February 26, 2021
Token face value: USD 100 per token
Guided issue price: US$99.79
Custody, transfer agent, token issuance platform: Fusang Vault
Minimum trading unit: 1 LBFEB21
The highest trading unit: 10000 LBFEB21
Fusang Exchange stated that these ERC20 tokens can be bought and sold in U.S. dollars and BTC, and the funds raised will be deposited in the Labuan branch of China Construction Bank Co., Ltd. as fixed deposits due in February 2021. In addition, these ERC-20 tokens constitute the issuer’s direct and unconditional guarantee obligation for subsequent repayment, and all tokens enjoy the same priority and status at any time.
Fusheng CEO Henry Chong said that these bonds are actually like 3-month fixed deposit products, but the yield is higher than most dollar bank deposit rates.
Who is Fusang?
This time, it is worth paying attention to Fusang Exchange, the listed exchange where CCB issued bonds.
Who is Fusang Exchange? According to the official website of Fusang Exchange, in March 2019, Fusang Exchange obtained a license from the Stock Exchange in Labuan, Malaysia, in accordance with Article 134 of Part IX of the Labuan Financial Services and Securities Act 2010 (LFSSA). The regulated platform provides end-to-end infrastructure to support the issuance of securities tokens (STO), so that both retail and institutional investors can safely, compliantly and conveniently enter the digital asset market.
Fusang Exchange is a subsidiary of Fusang Corp. Founded in 2014, Fusang Corp is a family office management agency, and its CEO is Henry Chong. Fusang Group and Portcullis TrustNet, an independent trust and family office service provider headquartered in Singapore, are mutually related companies. Henry Chong is the son of Zhang Guoguang, Chairman of Portcullis TrustNet. In February 2019, Fusang Group announced that the family office business was provided by Portland Credit Link, and Fusang turned to financial technology and digital asset business. Fusang Corp has tokenized all of its equity ERC20, the token name is FSC, and the contract address:
In addition to traditional IPOs, Fusang Exchange is also committed to supporting the digital tokenization of securities and is the first stock exchange in Asia that allows companies to conduct public offerings through digital IPOs. Therefore, it provides trading of traditional securities, tokenized securities, cryptocurrencies and fiat currencies. Fusang Exchange also owns an affiliated custodian Fusang Vault.
Labuan, Malaysia is a Federal Territory in the east of Malaysia, located in the south of Sabah. Labuan has been under the direct jurisdiction of the Federal Government since it became a Federal Territory in 1984 and became a free port and an international offshore financial center in 1990.
