OCBC becomes Singapore’s first bank to tokenise corporate bonds

OCBC becomes Singapore’s first bank to tokenise corporate bonds (Source – Unsplash))

• OCBC has become the first bank in Singapore offering tokenised bonds.
• APAC leads in digital asset adoption, with 29% of 2024’s cryptocurrency trades.

OCBC has appeared as the first bank in Singapore to offer bespoke tokenised bonds to corporate accredited investors (corporate AIs) – businesses with net assets exceeding SG$ 10 million. The tokenised bonds are tailored to match any client’s preferred tenor and yield. Once structured, bonds are minted and transferred directly to a digital wallet created on OCBC’s asset tokenisation platform.

The innovation aligns with Singapore’s broader push to scale the use of tokenised assets and reflects the Asia-Pacific (APAC) region’s leadership in digital asset adoption. In early 2024, APAC accounted for 29% of global digital currency transactions, surpassing North America (19%) and Western Europe (22%). Countries like Singapore, Hong Kong, and Japan are at the forefront of the trend, with adoption from individuals and businesses.

A recent study indicated that about half of wealthy Asian investors own cryptocurrency, while nearly half of APAC organisations are actively working on blockchain and digital asset projects. Some major banks in Hong Kong, including UBS and HSBC, are enabling high-net-worth clients to trade cryptocurrency ETFs.

Expanding the scope of tokenisation

The issuing of tokenised bonds marks OCBC’s second commercial use of its blockchain infrastructure, which it introduced in 2022. The bank’s first initiative was a partnership with the Land Transport Authority (LTA) in 2024 to pilot a blockchain-based conditional payment system for construction projects.

The adoption of tokenised bonds complements the APAC region’s growing interest in sophisticated digital asset products. OCBC’s offering addresses traditional barriers in the bond market in Singapore, like the high minimum investment of SG$ 250,000, which can lead to risk concentration. Tokenisation lets corporate AIs invest in denominations as little as SG$ 1,000. The incorporation not only helps investors diversify their portfolios but makes it easier to liquidate assets in smaller amounts when cash flow is required.

Kenneth Lai, Head of Global Markets at OCBC, emphasised the bank’s commitment to innovation: “As an industry, we have made significant strides in understanding and recognising the vast potential of tokenised assets. As we shift our focus towards commercialisation, we are proud to have developed bespoke tokenised bonds via our asset tokenisation platform. The innovation provides flexible and liquid investment alternatives, bringing tangible benefits to our customers. Using our asset tokenisation capabilities, we will progressively expand our offerings to include other types of tokenised assets.”

2. Challenges and opportunities in APAC

Despite the rapid growth of digital assets in APAC, the regulatory landscape remains uneven across the region. Progressive hubs like Singapore and Hong Kong are fostering innovation with forward-thinking regulations, while countries like China have imposed stricter measures, including bans on cryptocurrency transactions.

Challenges and opportunities in APAC

Despite the rapid growth of digital assets in APAC, the regulatory landscape remains uneven across the region. Progressive hubs like Singapore and Hong Kong are fostering innovation with forward-thinking regulations, while countries like China have imposed stricter measures, including bans on cryptocurrency transactions.

The OCBC asset tokenisation platform simplifies the bond lifecycle, encompassing creation, minting, ownership transfers, custody, and redemption through token burning. The bank plans to extend this facility beyond fixed-income assets, perhaps tokenising structured products, funds, and other assets. Its policies align with a broader trend in APAC, where financial institutions can meet rising demand for digital asset products like custody solutions, trading platforms, and investment vehicles.

In November 2024, OCBC completed its first tokenised bond transaction with a mid-sized Singaporean manufacturing company. To diversify its portfolio and move away from fixed deposits, the client opted for a bond with a tenor of less than a year.

The entire transaction was settled on the same business day, marking a significant improvement over the typical five-day settlement period for conventional bonds. The success demonstrated the potential for greater acceptance of tokenised assets among corporate investors.

APAC’s leadership in global digital asset adoption provides a unique opportunity for institutions like OCBC. Tokenisation has the ability to transform the financial world. It improves accessibility, liquidity, and transparency while unlocking new opportunities for innovation.

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Muhammad Zulhusni

As a tech journalist, Zul focuses on topics including cloud computing, cybersecurity, and disruptive technology in the enterprise industry. He has expertise in moderating webinars and presenting content on video, in addition to having a background in networking technology.

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