OCBC Bank has reportedly introduced a bespoke tokenized bond, becoming the first bank in Singapore to offer such an option to Corporate Accredited Investors (Corporate AI).
Company AI is a company with net assets of more than S$10 million.
According to OCBC, the tokenized bonds will be available in denominations of S$1,000, allowing customers to more easily diversify their portfolios.
Tokenized bonds referencing investment-grade assets are tailored to the customer’s desired term and yield.
Once structured, it is minted on OCBC’s proprietary asset tokenization platform and transferred to the client’s digital wallet.
This will be the second commercial application of OCBC’s blockchain infrastructure developed in 2022.
Its first use case is partnership In 2024, it will collaborate with the Land Transport Authority (LTA) to pilot a blockchain-based conditional payment solution for construction projects.
This launch coincides with Singapore’s efforts to expand the commercialization and use of tokenized assets.
Corporate bonds typically require a minimum trading value of S$250,000, which can lead to concentration risk for investors.
Tokenization allows for fractional ownership of S$1,000 units, lowering the barrier to entry and allowing clients to build more diversified portfolios.
Customers can also liquidate their investments in smaller amounts to meet cash flow requirements.
In November 2024, OCBC completed its first tokenized bond transaction for a mid-sized manufacturing customer in Singapore.
The bond had a maturity of less than one year and settled within one business day. This is significantly faster than the traditional 5-day payment process.
This customer wanted to diversify their portfolio from term deposits and leveraged tokenized bonds to achieve their investment goals.
OCBC plans to gradually expand its asset tokenization capabilities to include structured products and funds, exploring the potential of blockchain-based solutions to meet evolving customer needs.
Kenneth Lai, Head of Global Markets at OCBC, said:
“As an industry, we have made great strides in understanding and realizing the enormous potential of tokenized assets. As we shift our focus to commercialization, we are continuing to grow through asset tokenization platforms. We are proud to have developed a bespoke tokenized bond.
This innovation provides flexible and liquid investment options with tangible benefits for our customers. We will leverage our asset tokenization capabilities to gradually expand our services to include other types of tokenized assets. ”
Featured image credit: Edited from freepic
