Chinese state-owned firm issues world’s first public RWA bond on Ethereum

China is increasingly embracing certain use cases for digital assets and blockchain technology.

Summary

• Chinese state-owned firm Futian Investment Holding issued its first RWA bonds
• Ethereum-based bonds will enable investors to buy the company’s debt
• China has a complicated relationship with digital assets

Real-world assets are coming to China in a major way. On Monday, September 1, Chinese state-owned enterprise Futian Investment Holding announced the issuance of the first RWA public offering of a digital bond.

The deal, dated August 29, saw the Shenzhen-based company issue offshore bonds in Hong Kong, valued at 500 million yuan. The bonds, issued on the Ethereum (ETH) blockchain, have a two-year expiry date and an interest rate of 2.62%.

According to the company, the move was a response to a growing trend in the adoption of tokenization and RWA technology. Part of the motivation was also to show that the firm was taking a forward-looking approach to new technologies.

“This move not only helps the company further broaden its global financing channels and optimize its capital structure, but also fully leverages Hong Kong’s policy dividends, injecting solid state-owned enterprise momentum into the high-quality development of Futian District,” the company wrote.

It is important to note that the RWA bond is a traditional financial instrument that is now available on the blockchain. In this sense, it does not constitute China’s embrace of digital assets more broadly.

China’s complicated relationship with crypto

China has a complicated relationship with crypto. In 2021, China implemented a total ban on all crypto transactions and mining. The main reason for the ban was its effects on energy demand, as well as concerns that crypto might destabilize the financial system.

Still, the country continues to allow specific use cases for digital assets and blockchain technology. Most recently, China, like many other countries, has grown concerned about the growing popularity of stablecoins. Notably, dollar-denominated stablecoins currently dominate the market, which could have negative effects on other currencies.