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China Construction Bank Withdraws Blockchain Bond


China Construction Bank Withdraws Blockchain Bond Blockchain, Featured, Home CoinGenius Hosts Virtual Crypto Event The Road To Mass Adoption

China Construction Bank Corporation (CCB) has quietly withdrawn a planned $3 billion bond that was to be issued on FUSANG, a blockchain-focused stock exchange platform based in Malaysia.

In an announcement on its website, published on Nov 23, FUSANG revealed that the bond was suspended after CCB’s branch in Labuan, Malaysia pulled out.

FUSANG, which allows trading of both cryptocurrencies and digital securities was initially supposed to list the bond upon its issuance by a CCB special purpose vehicle called Longbond Ltd on Nov 13. At the time, CCB asked for a postponement before communicating its withdrawal on Nov 20.

CCB Blockchain Bond: From Announcement to Withdrawal

News of the proposed blockchain bond had generated a fair amount of buzz. The move would have meant the world’s second-largest bank by assets was leveraging blockchain technology in an unprecedented manner for a Chinese state-controlled bank.

However, with $58 million worth of bond certificates due to go live on Nov 13, CCB suddenly informed FUSANG that it had posponed the launch.

Following a letter from FUSANG on Nov 16 requesting more clarity and an updated listing timeline, CCB responded on Nov 20 informing the exchange that it would not be going ahead with the bond issuance.

Expressing his disappointment at the suspension, FUSANG CEO Henry Chong said:

“While we are disappointed that this Listing has been suspended, there were no legal, regulatory, operational, or technical issues with the FUSANG platform or the IPO process and filing. The overwhelming investor interest and demand for this landmark USD 3 billion program has been a fantastic validation of the digital issuance and listing process that we have created, and it is unfortunate that the Listing Sponsor has decided that they are unable to proceed with this Listing.”

Possible Reason for Bond Suspension

On Nov 22, BeInCrypto reported that Chinese Prime Minister Xi Jinping urged the world to adopt an “open and accommodating” view of Central Bank Digital Currencies (CBDC) in a speech to G20 leaders. This came in the context of China’s recent phased launch of its digital yuan in Shenzhen.

While China has consistently maintained a hostile hardline on cryptocurrencies, it is making efforts to popularize and internationalize its digital yuan, which offers all the immediacy, fungibility, and cross-border functionality of cryptocurrencies without any of the privacy.

Some analysts believe that the CCB’s Labuan bond was suspended because it could be perceived as endorsing cryptocurrency and thus undermining the Chinese government’s efforts to push its CBDC.

Reuters reports that earlier in November, when news of the bond first emerged, the CCB stated that its Labuan branch was not the bond issuer and that it did not accept bitcoin.

At press time, CCB was yet to comment on the matter.

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David is a journalist, writer and broadcaster whose work has appeared on CNN, The Africa Report, The New Yorker Magazine and The Washington Post. His work as a satirist on ‘The Other News,’ Nigeria’s answer to The Daily Show has featured in the New Yorker Magazine and in the Netflix documentary ‘Larry Charles’ Dangerous World of Comedy.’ In 2018, he was nominated by the US State Department for the 2019 Edward Murrow program for journalists under the International Visitors Leadership Program (IVLP). He tweets at @DavidHundeyin

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Source: https://beincrypto.com/china-construction-bank-withdraws-blockchain-bond/

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