The Bank of China is the first Chinese bank to issue token securities worth $28 million on the Ethereum Blockchain in Hong Kong. A prudent change in direction?

While in the U.S. the crypto sector is increasingly comes under pressure to stand by the SEC, The third-largest bank of China is venturing into the world of cryptocurrencies by tokenizing securities on the Ethereum blockchain. The total value of the securities is 200 million yuan, equivalent to about US$28 million. This makes the Bank of China (BOCI) the first bank in China that issues token securities on a public blockchain. BOCI's move comes at a time when China wants to make Hong Kong a major trading center for virtual assets.

An important development for token effects

A token security is recorded in a distributed ledger rather than traditional computerized ledger entries. Large banks such as Citigroup and Bank of America geloven that the tokenization of real world assets (RWAs) could drive the adoption of cryptocurrencies and bring more than US$4 trillion in value onto blockchain networks by 2030.

Hong Kong increasingly important for Ethereum

The Bank of China's decision to issue securities on Ethereum highlights Hong Kong's growing ambition to become one of the hubs of the crypto economy. Only in early June legalized Hong Kong cryptocurrency trading for retail investors.

In addition, Hong Kong lawmaker Johnny Ng invited Coinbase out to settle in Hong Kong establish after the U.S. stock exchange was sued by the SEC. In addition, a whitepaper published May 27 by the Beijing Municipal Science and Technology Commission that China plans to further expand its Web presence3. The developments in Hong Kong suggest that China is trying to take advantage of developments in the US.

The future of token effects

Tokenized securities are an important step forward in the way securities are issued and traded. They enable more efficient, transparent and secure trading that can overcome 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.