Bitcoin Primed For Surprise $3 Billion China Bank Bond
Bitcoin has recently found its feet after an uncertain couple of years following its 2017 boom and subsequent bust.
The bitcoin price has recently rallied to over $16,000 per bitcoin, riding a raft of positive news to come within touching distance of its 2017 all-time high of around $20,000—a peak that surging demand out of China helped it reach.
Now, with China continuing to tightly regulate bitcoin and other cryptocurrencies even as it begins the roll out of its hotly-anticipated digital yuan, China Construction Bank, the world’s second largest bank by assets, is planning to raise $3 billion from the sale of bonds that can be bought with bitcoin and U.S. dollars.
China Construction Bank last week made $58 million worth of digital certificates, a first tranche of the $3 billion bond programme, available for public subscription on the Fusang Exchange, a Labuan, Malaysia-based bourse that also facilitates the trading of cryptocurrencies.
The bond is the first digital security issued by a Chinese bank on a blockchain and can be bought for as little as $100.
“The implementation of blockchain technology enables financial inclusion, reduces service delivery costs, and increases transactional efficiency,” Henry Chong, the chief executive of Fusang Exchange, said in a statement, adding he believes “that this will be the start of Crypto 2.0.—the true institutionalisation of digital asset products.”
However, bitcoin hasn’t quite managed to return to the all-time highs set in late 2017, when bitcoin mania swept the world and rocketing demand from China’s 1.3 billion population forced the government to crack down hard on bitcoin and cryptocurrency trading.
Bitcoin and crypto adoption from China’s banks, making up four of the five largest in the world, could, however, bring about a wave of fresh demand for bitcoin and similar digital assets across Asia.
“China has always encouraged the development and adoption of blockchain technology across industries but offers no recognition of bitcoin as legal payment. Its policy has not changed since 2017,” Flex Yang, the chief executive of Hong Kong-based crypto-asset financial services firm Babel Finance, said via email.
“What has been shaping Chinese demand for cryptocurrency, however, is that more bitcoins and mining machines have been bought by Western trust funds such as Grayscale. The recent regulatory change in Hong Kong on licensing is a positive move for the industry. Together with the development of crypto financial infrastructure including custodian and regulated crypto asset management funds, these effort will pave the way for the entrance of institutional investors in Asia.”
Meanwhile, the bitcoin and cryptocurrency community has been cheering bitcoin’s latest bull run, celebrating what is widely seen as a firmer footing and despite continued price swings.
“This bull run is different from what we’ve seen before—bitcoin has begun to stabilize as an asset, trading firmly above $10,000 per bitcoin even when it dips,” Pascal Gauthier, the chief executive of bitcoin and cryptocurrency hardware wallet maker Ledger, said via email, adding Ledger has seen an uptick in sales as the bitcoin price has climbed.
“Amid a second wave and uncertainty surrounding the global economy following the U.S. election, bitcoin is on the way up again, reaching a yearly high of $15,000 per bitcoin with room to grow.”
Bitcoin News Network