Hua Xia Bank, a publicly traded financial institution associated with the Chinese government, issued 4.5 billion yuan ($600 million) in tokenized bonds on Wednesday 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-controlled commercial entity in China. The bonds provided a three-year fixed yield of 1.84% for investors.
The $600 million bond tranche was exclusively auctioned to holders of China’s digital renminbi, also referred to as the digital yuan.
Tokenized bonds may decrease the necessity for intermediaries in transaction clearing, speeding up settlement times and reducing transaction costs.
China has wavered on the matter of stablecoins and cryptocurrencies in 2025, opting to develop a central bank digital currency (CBDC) and state-approved applications of permissioned blockchain technology, as digital assets gain geostrategic significance.
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China’s government consistently alters its stance on stablecoins and cryptocurrencies, fluctuating between imposing bans and softening regulations to permit private firms to function in the sector.
In early August, China targeted local brokers and financial firms conducting stablecoin seminars in the country, mandating these companies to cancel any planned events and cease publishing research on the topic.
At that time, Chinese regulators expressed concerns that stablecoins might be conduits for fraudulent activities in the country, according to Bloomberg.
Less than two weeks later, reports surfaced 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 a signal to commence developing yuan-pegged tokens, but a caution from Beijing in October regarding private stablecoins delayed those initiatives.
The People’s Bank of China, the nation’s central bank, launched an operations center for the digital yuan in September. Based in Shanghai, this hub will manage cross-border settlement and foster other blockchain-related projects.
Magazine: China officially disapproves of stablecoins, DBS trades Bitcoin options: Asia Express
