Chinese Bank Converts $600M in Yuan-Backed Government Bonds into Digital Tokens

Hua Xia Bank, a state-linked publicly traded financial institution, issued 4.5 billion yuan ($600 million) in tokenized bonds on Wednesday, aiming to streamline the auction process by eliminating intermediaries.

As reported by Sina, the on-chain government bonds were issued by Hua Xia Financial Leasing, a subsidiary of the state-controlled Hua Xia Bank. The bonds offered a fixed yield of 1.84% for three years.

The $600 million bond issuance was auctioned solely to holders of China’s digital renminbi, commonly referred to as the digital yuan.

Tokenized bonds could minimize the number of intermediaries required for transaction clearing, thus reducing settlement times and lowering transaction costs.

In 2025, China has oscillated regarding stablecoins and cryptocurrencies, focusing instead on developing a central bank digital currency (CBDC) and state-approved uses of permissioned blockchain technology, as digital assets become strategically significant.

Related: China reaffirms crypto ban after noticing ‘speculation has resurfaced’

Mixed signals coming from China as crypto becomes more relevant

The Chinese government continues to shift its stance on stablecoins and cryptocurrencies, oscillating between bans and relaxed regulations to accommodate private sector operations.

In early August, China targeted local brokers and financial firms hosting stablecoin seminars, instructing them to cancel events and cease related research.