Hua Xia Bank, a publicly listed financial institution associated with the Chinese government, issued 4.5 billion yuan ($600 million) in tokenized bonds on Wednesday, aiming to minimize clearing friction by eliminating intermediaries from the auction process.
As reported by Sina, the on-chain government bonds were issued by Hua Xia Financial Leasing, a subsidiary of Hua Xia Bank, a state-owned commercial bank in China. The bonds provide a fixed yield of 1.84% over three years for holders.
The $600 million bond tranche was exclusively auctioned to holders of China’s digital renminbi, also referred to as the digital yuan.
Tokenized bonds can decrease the number of intermediaries required for transaction clearing, thereby shortening settlement times and reducing transaction costs.
In 2025, China has oscillated on the topic of stablecoins and cryptocurrencies, opting instead to develop a central bank digital currency (CBDC) and authorized uses of permissioned blockchain technology as digital assets gain geostrategic significance.
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China’s government continues to pivot on stablecoins and cryptocurrencies, fluctuating between enacting bans and loosening regulations to permit private companies to operate in the sector.
In early August, China targeted local brokers and financial companies hosting stablecoin seminars within the country, instructing these enterprises to cancel any upcoming events and cease publication of related research.
At that time, Chinese regulators expressed concern that stablecoins could serve as a conduit for fraudulent activities in the nation, according to Bloomberg.
Less than two weeks later, reports emerged indicating that China’s government was contemplating legalizing privately-issued yuan stablecoins to enhance the fiat currency’s role in foreign exchange markets.
Chinese tech giants, including Alibaba, Ant Group, and JD.com, interpreted this as an opportunity to start developing yuan-pegged tokens, but a caution from Beijing in October regarding private stablecoins halted those initiatives.
The People’s Bank of China, the nation’s central bank, established an operations center for the digital yuan in September. The hub, located in Shanghai, will manage cross-border settlement and the development of various blockchain-related projects.
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