Hua Xia Bank, a publicly traded financial entity linked to the Chinese government, announced the issuance of 4.5 billion yuan ($600 million) in tokenized bonds on Wednesday, aiming to minimize clearing friction by eliminating intermediaries in the auction process.
According to Sina, the onchain government bonds were issued by Hua Xia Financial Leasing, a subsidiary of Hua Xia Bank, a state-controlled commercial bank 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 need for intermediaries in transaction clearing, thus reducing settlement times and lowering costs.
In 2025, China has shown inconsistency regarding stablecoins and cryptocurrencies, opting instead to focus on developing a central bank digital currency (CBDC) and state-approved applications of permissioned blockchain technology, as digital assets gain geostrategic significance.
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The Chinese government continues to oscillate on the subject of stablecoins and cryptocurrencies, fluctuating between enforcement of bans and relaxing regulations to permit private sector operations within the domain.
In early August, China intensified its crackdown on local brokers and financial firms involved in stablecoin seminars, instructing them to cancel planned events and halt publication of research on the topic.
At that time, regulators expressed concerns that stablecoins might serve as a vehicle for fraudulent activities in the country, as reported by Bloomberg.
However, less than two weeks later, reports surfaced indicating that the government was contemplating legalizing privately-issued yuan stablecoins to enhance the fiat currency’s standing in foreign exchange markets.
Chinese tech giants including Alibaba, Ant Group, and JD.com interpreted this as a green light to initiate the development of yuan-pegged tokens, but a warning from Beijing in October regarding private stablecoins put these plans on hold.
The People’s Bank of China, the nation’s central bank, inaugurated a digital yuan operations center in September. This hub, located in Shanghai, will oversee cross-border settlements and advance other blockchain-related initiatives.
Magazine: China officially disapproves of stablecoins; DBS engages in Bitcoin options: Asia Express
