A blockchain bond worth $3 billion has been withdrawn from a Malaysian cryptocurrency exchange. The said bond has been arranged by the tier-1 branch of Beijing-headquartered China Construction Bank Corporation [CCB] unit using blockchain technology.
According to the latest reports, the bond was withdrawn at the request of the issuer – Longbond Ltd, which is a special purpose vehicle created for the purpose of issuing digital bonds and deposit the proceeds with CCB’s branch in Labuan, a Malaysian offshore financial center.
The listing sponsor and the lead manager of the bond in question was CCB Labuan and it was to be tradable on the FUSANG exchange, which happens to be a platform that trades digital assets such as Bitcoin, as well as Security Token Offerings [STOs], the report said.
It is important to note that the listing was originally scheduled to go live on the Exchange on the 13the of November. However, as just before the listing time, FUSANG revealed receiving written communication from the Listing Sponsor on behalf of the Issuer, where it requested for the postponement of the Listing. Three days later, on the 16th of November, the exchange formally wrote to the Listing Sponsor to ask for a reason as to the postponement, as well as the updated timeline for the Listing. But the Listing Sponsor responded on the 20th of November that it had “decided not to proceed”.
The Blockchain Bond in brief:
According to FUSANG, the aim of the bond was to give investors access to bank-secured deposits at an annualized rate of LIBOR +50 bps [~0.70 %]. This figure is significantly higher than the market interest rate for typical fixed deposits. The platform asserted that the bond would offer retail investors access to an investment that was previously unavailable to them, while at the same time bringing legitimacy and investor confidence to the world of cryptocurrency and decentralized finance.
Additionally, the bond was supposed to be issued at a discount and can be traded on FUSANG Exchange prior to maturity, in US Dollar and Bitcoin with a total program target size of $3 billion.
As revealed by the FUSANG Chief Executive, Henry Chong, the bank had not provided a reason for suspension of the same. Chong went on to say that,
“While we are disappointed that this Listing has been suspended, there were no legal, regulatory, operational, or technical issues with the FUSANG platform or the IPO process and filing. The overwhelming investor interest and demand for this landmark USD 3 billion program has been a fantastic validation of the digital issuance and listing process that we have created, and it is unfortunate that the Listing Sponsor has decided that they are unable to proceed with this Listing”