Bank of China, one of the largest commercial banks in the country, issued a bond of $2.8 billion to Small and Medium Enterprises (SME). Notably, the bonds are based on blockchain technology and are issued at an annual interest rate of 3.5%. The fund is issued to support and develop a real economy.
Earlier, in October, Chinese President Xi Jinping endorsed the adoption of blockchain technology in various sectors. The latest move of Bank of China can be seen in connection to the statement. Interestingly, the bonds have also been issued through the blockchain of the Bank of China and mark the first transaction of this kind in the country.
As per reports, China is aiming to grow at an annual rate of 65.7% in the field of blockchain technology and will peak in 2023. It is estimated that the blockchain market in china will worth around $2 billion by then. Not to forget that Bank of China has actively participated in felicitating its social duties as a state-owned bank.
The issuance of bonds to SME’s uses the blockchain network to support on-chain interaction and deposit of key information. It will ease up the process of documentation at the time of issuance of the bond. The bank played a big role in achieving the rapid development goals set by the nation through the inclusive financial business approach.
China has emerged as a fertile place for the blooming of blockchain and cryptocurrencies in recent years. Notably, the country earlier proposed to develop its own version of central bank digital currency (CBDC). Moreover, by the end of September, the Bank of China’s SME loan balance sum was 404 billion yuan showing an increase of 35.36% compared to the same time last year. It hosts almost 410,000 small and micro-enterprise customers in total.
However, the Chinese authorities hit hard on the sector, looking at the security concerns it brings along like illicit transactions, illegal funding, money laundering, and terror financing. The censoring of the popular Ethereum blockchain explorer, Etherscan.io, is one such example. Besides, the crackdown on the sector, the illegal crypto market is the 3rd largest black market in the country.