Chinese Bank Converts $600 Million in Government Bonds into Tokens Backed by Yuan

Hua Xia Bank, a publicly listed financial entity associated with the Chinese government, launched 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 Hua Xia Bank, which is a state-controlled commercial bank in China. The bonds provided holders with a three-year fixed yield of 1.84%.

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

Tokenized bonds may lessen the number of intermediaries required for transaction clearing, leading to faster settlement and lower transaction costs.

In 2025, China has oscillated on the topic of stablecoins and cryptocurrencies, opting instead to cultivate a central bank digital currency (CBDC) and state-approved applications of permissioned blockchain technology, as digital assets gain geostrategic significance.

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Mixed signals from China as crypto gains relevance

The Chinese government continues to shift its stance on stablecoins and cryptocurrencies, alternating between enacting bans and easing regulations to permit private companies to participate in the sector.

In early August, China took action against local brokers and financial firms conducting stablecoin seminars in the country, instructing them to cancel any scheduled events and cease publishing related research.