In a landmark move for digital finance in Asia, Bank of China International (BOCI) has become the first Chinese financial institution to issue tokenized securities in Hong Kong. On June 9, 2023, BOCI successfully launched a fully digital structured note worth 200 million RMB (approximately $29 million USD), marking a pivotal moment in the region’s financial digitization journey. This innovative offering was initiated and distributed by UBS to its clients across the Asia-Pacific region, signaling the beginning of a strategic partnership focused on blockchain-based financial products.
The issuance represents more than just a technological milestone—it reflects a growing institutional embrace of blockchain for compliant, efficient, and scalable financial solutions. By leveraging public blockchain infrastructure while adhering to strict regulatory frameworks, BOCI and UBS have set a precedent for how traditional finance can integrate with decentralized technologies.
Advancing Digital Securities Through Blockchain Innovation
This collaboration builds on UBS’s prior experience in tokenization. In December 2022, the Swiss bank issued a $50 million fixed-rate tokenized note under UK and Swiss law, settling on a permissioned blockchain. The latest transaction with BOCI takes this innovation further by utilizing the Ethereum mainnet, making it the first regulated security in the Asia-Pacific region to be tokenized on a public blockchain under dual legal frameworks—Hong Kong and Swiss law.
This cross-jurisdictional compliance achievement underscores the maturity of blockchain infrastructure and the increasing confidence among global financial institutions in its ability to support real-world asset (RWA) tokenization. The use of Ethereum, a widely adopted and secure decentralized network, enhances transparency, reduces settlement times, and enables programmable financial logic—key advantages over traditional issuance methods.
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A New Era for Structured Products
Structured notes are hybrid financial instruments that combine fixed-income securities with derivatives to offer customized return profiles. Traditionally, these products have been complex to issue and distribute due to manual processes, lengthy settlement cycles, and limited accessibility. Tokenization transforms this model by enabling:
- Faster issuance and settlement: Automation through smart contracts reduces time-to-market from weeks to days.
- Increased liquidity: Fractional ownership allows smaller investors to participate.
- Enhanced transparency: All transactions are recorded immutably on-chain.
- Regulatory compliance: Identity verification and investor accreditation can be embedded directly into the issuance process.
By digitizing these instruments, BOCI and UBS are not only improving operational efficiency but also expanding access to sophisticated investment products across the Asia-Pacific region.
BOCI’s Leadership in Financial Innovation
As the offshore investment banking arm of the Bank of China Group, BOCI has long been at the forefront of product innovation in structured finance. It holds the distinction of being the first Chinese financial institution to issue structured notes overseas and remains a market leader in both issuance volume and service comprehensiveness.
Wang Ying, Deputy CEO of BOCI, emphasized the institution’s commitment to digital leadership:
“BOCI is proud to maintain our pioneering role in tech-driven finance. Through our collaboration with UBS, we are dedicated to developing blockchain-based digital structured products for Asia-Pacific clients, simplifying digital asset markets and product offerings. We are inspired by the evolution of Hong Kong’s digital economy and remain committed to advancing digital transformation and innovation within the financial industry.”
This vision aligns with Hong Kong’s broader strategy to position itself as a global hub for fintech and virtual asset innovation. With supportive regulatory developments and growing institutional participation, the city is rapidly becoming a testing ground for next-generation financial infrastructure.
UBS Expands Tokenization Capabilities Across Asset Classes
UBS continues to expand its tokenization services through UBS Tokenize, a dedicated platform offering end-to-end solutions for issuing and managing digital securities. Beyond structured products, the bank is actively exploring tokenized fixed income, repo financing, and other capital markets instruments.
Aurelian Troendle, Global Head of MTN Trading at UBS, highlighted the strategic importance of the BOCI partnership:
“We’re pleased to collaborate with BOCI to bring structured products onto public blockchain networks, meeting rising client demand across Asia-Pacific for fully regulated digital asset solutions. Blockchain technology enables significant efficiency gains in high-frequency issuance activities, directly benefiting investors. UBS is excited to partner with issuers like BOCI to extend our digital capabilities and enhance client service.”
The success of this transaction demonstrates that regulated institutions can harness public blockchains without compromising compliance or security—a critical step toward mainstream adoption.
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Frequently Asked Questions (FAQ)
Q: What are tokenized securities?
A: Tokenized securities are traditional financial assets—such as bonds, equities, or structured notes—that are issued on a blockchain as digital tokens. They offer benefits like faster settlement, fractional ownership, and automated compliance through smart contracts.
Q: Why is using Ethereum mainnet significant for regulated securities?
A: Using Ethereum’s public mainnet introduces transparency, decentralization, and global accessibility while maintaining compliance through identity layers and permissioned logic. This proves that public blockchains can support regulated financial products securely.
Q: How does this benefit investors?
A: Investors gain access to more efficient, transparent, and potentially more liquid products. Automated processes reduce costs and errors, while faster settlement improves capital efficiency.
Q: Is this tokenized note available to retail investors?
A: Currently, the issuance is targeted at institutional and qualified investors through UBS’s private banking network. Retail access may expand as regulatory frameworks evolve.
Q: What role does Hong Kong play in digital asset innovation?
A: Hong Kong has introduced clear regulations for virtual assets and is actively supporting fintech innovation. Its status as a global financial center makes it an ideal launchpad for institutional-grade digital securities.
Q: Can other banks replicate this model?
A: Yes. The BOCI-UBS collaboration serves as a blueprint for cross-border, compliant tokenization. As standards mature, more institutions are expected to follow suit using similar frameworks.
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Conclusion: Building the Future of Finance
The joint issuance of tokenized structured notes by BOCI and UBS marks a turning point in the convergence of traditional finance and blockchain technology. By combining regulatory rigor with cutting-edge infrastructure, they have demonstrated that scalable, compliant digital securities are not only possible but already operational.
As real-world asset tokenization gains momentum, we can expect more banks, asset managers, and issuers to adopt similar models—driving greater efficiency, inclusion, and innovation across global capital markets. With Hong Kong emerging as a key player in this transformation, the stage is set for a new era of digital finance rooted in trust, technology, and transparency.