The Hong Kong arm of China’s GF Securities has issued a native tokenized security on a public blockchain. GF Securities Group is a major Chinese and Hong Kong securities broker listed on the Hong Kong and Shenzhen stock exchanges. It has a market capitalization of over US$13 billion.
Details about the bonds are a little thin, but we can exclusively reveal the issuance was for US$100 million in commerial paper. They were issued on the Ethereum blockchain and the issuer is group firm GuangFa Holdings (Hong Kong). In a similar fashion, banks such as Santander and Societe Generale also self issued their first bonds in 2019.
While the news came from technology provider ABT Tech, Linklaters confirmed it was the legal advisor for the issuance. The law firm also worked on Hong Kong’s inaugural tokenized green bond issuance and the Bank of China Investment tokenized structured note. ABT Tech provided the real world asset (RWA) tokenization platform, which adds layers of identity, compliance and confidentiality.
“This is a testament that Hong Kong law is sufficiently flexible and resilient to accommodate the tokenisation of financial assets to serve the needs of market participants without specific need for widespread law reform,” said Chin-Chong Liew, Linklaters’ Asia Head of Structured Finance and Derivatives.
He was indirectly referring to the guidance the Securities and Futures Commission published in November regarding tokenization for intermediaries.
Update: Added issuance amount of $100m, subsequently clarified it was commercial paper not a bond
