Singapore’s OCBC bank launches fractional tokenized bonds for corporates

Singapore’s OCBC Bank has launched a blockchain-based solution enabling corporate clients to invest in fractionalized tokenized bonds, marking a shift in corporate treasury management.

The bank’s accredited investors, defined as entities with over S$10 million ($7.3 million) in assets, can now purchase bond units starting from S$1,000 — a significant reduction from the traditional minimum of S$250,000, according to Ledger Insights.

The new solution also allows investors to customize bond duration and coupon rates. These tokenized bonds reference existing investment-grade assets, providing corporate clients with more tailored and liquid investment options.

For instance, a mid-sized construction firm recently utilized the service to diversify its treasury holdings beyond fixed deposits, Ledger Insights reported.

Settlement times have also improved, with transactions now taking just one day compared to the typical five days.

This initiative builds on OCBC’s previous blockchain projects. In 2023, the bank partnered with ADDX for structured product issuances and introduced a conditional payment solution using blockchain. The system facilitated automatic disbursements for the Land Transport Authority, processing over S$22 million in payments by late 2024.

Global banks and tokenization

Global banks are beginning to explore tokenization for financial transactions. Last fall, the Reserve Bank of Australia launched a consultation on Project Acacia, a three-year initiative exploring wholesale central bank digital currency and tokenized asset markets.

The project sought public feedback on the potential benefits of tokenizing assets and using CBDCs for settlement.

Also, in June of 2024, Germany’s state-owned bank, Kreditanstalt fuer Wiederaufbau, started using blockchain technology with its first digital bond.