Corporate accredited investors (corporate AIs) will now be able to purchase bespoke tokenised bonds from OCBC, the Singapore-based bank, as it looks to commercialise and scale the usage of tokenised assets.
The tokenised bonds which reference investment grade bonds, are structured based on the client’s desired tenor and yield. They are then minted and transferred to the client’s wallet created on OCBC’s asset tokenisation platform. This is the second commercial use case using the OCBC blockchain infrastructure which was developed in 2022. The first commercial use case was a partnership with LTA to pilot a blockchain-based conditional payment solution for construction projects in 2024.
Corporate bonds usually have a high minimum transaction size of S$250,000, which could contribute to concentration risk. Tokenisation addresses this as it enables fractional ownership – a corporate AI client can subscribe to tokens at S$1,000 denominations. Corporate AIs are corporations that have net assets exceeding S$10million.
This in turn facilitates the building of more diversified portfolios with a range of assets. Clients can similarly liquidate investments in S$1,000 denominations to meet cashflow requirements.
OCBC’s asset tokenisation platform
OCBC’s asset tokenisation capability streamlines the entire lifecycle from creation and minting to ownership transfers and custody, and redemption through token burning. This is being progressively extended beyond fixed income assets. This will enable OCBC to tokenise a range of assets for its clients, including structured products and funds.
Kenneth Lai, head of global markets at OCBC said: “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. This innovation provides flexible and liquid investment alternatives, bringing tangible benefits to our customers. Leveraging our asset tokenisation capabilities, we will progressively expand our offerings to include other types of tokenised assets.”
Success story
OCBC completed its inaugural transaction for a mid-sized manufacturing client in Singapore in November 2024, minting a tokenised bond with a tenor of less than a year. This met the needs of the client as they intended to pivot from fixed deposits and diversify their investment portfolio. Other corporate AIs that have favoured fixed deposits in a high-interest rate environment, may similarly view tokenised bonds as a viable alternative as interest rates fall.
The transaction was settled within the same business day from the debiting of the client’s bank account to the transferring of digital tokens from OCBC to the client’s wallet which is custodised with OCBC. Traditional bond transactions usually take five days for settlement. This was the client’s first usage of tokenised assets.
