OCBC offers bespoke tokenised bonds to corporates
OCBC has emerged as the first bank in Singapore to offer bespoke tokenised bonds to corporate accredited investors (corporate AIs) – businesses with net assets exceeding S$10 million.
The tokenised bonds are tailored to match the client’s preferred tenor and yield. Once structured, they are minted and transferred directly to a digital wallet created on OCBC’s asset tokenisation platform.
The move marks OCBC’s second major commercial use of its blockchain infrastructure, which it introduced in 2022. The bank’s first initiative using the technology was a partnership with the Land Transport Authority (LTA) in 2024 to pilot a blockchain-based conditional payment system for construction projects.
The launch aligns with Singapore’s broader efforts to scale up the use of tokenised assets. Traditionally, corporate bonds require a high minimum investment of S$250,000, which can lead to concentration risks. Tokenisation addresses this issue by enabling fractional ownership, allowing corporate AIs to invest in denominations as low as S$1,000. This not only helps investors diversify their portfolios, but makes it easier to liquidate assets in small amounts when cashflow is required.
OCBC’s asset tokenisation platform simplifies each step of the bond’s lifecycle, including creation, minting, ownership transfers, custody, and redemption through token burning. The bank plans to extend the capability beyond fixed-income assets, paving the way to tokenise structured products, funds, and more.
Kenneth Lai, Head of Global Markets at OCBC, highlighted the significance of this innovation:
“As an industry, we have made significant strides in understanding and recognising the vast potential of tokenised assets. As we shift our focus towards commercialisation, we are proud to have developed bespoke tokenised bonds via our asset tokenisation platform. The innovation provides flexible and liquid investment alternatives, bringing tangible benefits to our customers. Using our asset tokenisation capabilities, we will progressively expand our offerings to include other types of tokenised assets.”
In November 2024, OCBC completed its first tokenised bond transaction for a mid-sized manufacturing company in Singapore. The client, seeking to move away from fixed deposits and diversify its portfolio, opted for a bond with a tenor of less than a year.
The entire transaction was settled on the same business day, including debiting the client’s account and transferring digital tokens to its OCBC-custodised wallet, and represented a substantial improvement on the five-day settlement period used for conventional bonds.
The transaction also represented the client’s first experience with tokenised assets, highlighting the potential for broader adoption among corporate investors.
For businesses accustomed to fixed deposits in a high-interest-rate environment, tokenised bonds are emerging as an attractive alternative as interest rates decline.
(Photo by Unsplash)
See also: Scammers drained $494 million in cryptocurrency wallet heists in 2024
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