Singapore’s second largest bank, OCBC, has introduced a new blockchain based solution for corporates seeking to diversify their treasury assets. They are offering custom tokenization of corporate bonds, selling the bonds to accredited corporate clients with assets of more than S$10 million. Instead of requiring a minimum investment of S$250,000, the units can be as little as S$1,000. Additionally, the investor can specify the desired duration and coupon. The tokens reference existing investment grade bonds.
OCBC touted the advantage as reducing the concentration in bond holdings, from the issuer perspective. For investors it means they can liquidate small denominations if they wish to use the funds for corporate purposes. OCBC’s investor for the solution was a mid-sized construction firm looking to diversify its treasury holdings away from fixed deposits. Settlement was the same day as opposed to the usual five days.
While OCBC may be the first Singapore bank to offer the bespoke tokenization solution, Citi-backed BondbloX has been fractionalizing bonds in Singapore for a few years.
“We are proud to have developed bespoke tokenised bonds via our asset tokenisation platform,” said Mr Kenneth Lai, Head of Global Markets at OCBC. “This innovation provides flexible and liquid investment alternatives, bringing tangible benefits to our customers. Leveraging our asset tokenisation capabilities, we will progressively expand our offerings to include other types of tokenised assets.”
Arguably OCBC has already being offering other assets, just not using its own tokenization platform. In 2023 it was involved in a structured product issuance in conjunction with Singapore tokenization platform ADDX.
Conditional payments using tokenization
Meanwhile, last year OCBC conducted its first transaction using its own blockchain-based conditional payment solution. The client was the Land Transport Authority of Singapore (LTA) which set up conditional payments for three construction contractors. Smart contracts automatically disburse payments when conditions are met. By November 2024 payments had exceeded S$22 million. The solution is separate from the bank’s work on Project Orchid for a digital Singapore dollar.
