BOCI and UBS Partner to Issue First Tokenized Security in Hong Kong

BOCI, a leading Chinese financial institution, has issued the first tokenized security in Hong Kong, reaching a milestone in digital finance. The CNH 200 million fully digital structured notes, originated by UBS, have been placed with clients in Asia Pacific, indicating a significant collaboration between BOCI and UBS in the digital structured notes arena.

This development comes after UBS’s issuance of a USD 50 million tokenized fixed rate note in December 2022, under English and Swiss law, on a permissioned blockchain. The latest venture takes a step forward, marking the first product of its kind in Asia Pacific, constituted under Hong Kong and Swiss law, and tokenized on the main Ethereum blockchain.

Both BOCI and UBS are pioneering the use of blockchain technology to enhance efficiency in high-frequency issuance activities. Ms Ying Wang, Deputy CEO at BOCI, expressed the institution’s dedication to driving the simplification of digital asset markets and products through blockchain-based digital structured products. She also highlighted BOCI’s commitment to promote the digital transformation of Hong Kong’s financial industry.

Meanwhile, UBS continues to broaden its tokenization services, targeting structured products, fixed income, and repo financing through its UBS Tokenize platform. Aurelian Troendle, Global Head of MTN Trading at UBS AG, emphasized the potential benefits blockchain technology can offer to investors.

This milestone achieved by BOCI and UBS signals a new era of digital securities, paving the way for further innovations in the field.


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Swiss regulators consider UBS takeover of Credit Suisse to prevent collapse

UBS would be able to reduce the size of Credit Suisse’s investment bank as a result of the purchase, with the combined firm constituting no more than a third of the newly combined business. A merger between UBS and Credit Suisse would result in the creation of one of the biggest and most systemically significant financial institutions in Europe. UBS has total assets on its balance sheet worth $1.1 trillion, while Credit Suisse has total assets at $575 billion.

Bypassing the typical Swiss regulations that call for a six-week consultation period during which shareholders can express their opinions on an acquisition, the emergency measures that are currently being considered would make it possible for the transaction to move forward without the approval of the company’s shareholders. Reportedly, the SNB and FINMA are aiming to secure a regulatory agreement by the end of the day on Saturday in order to conclude the purchase before to the opening of markets on Monday.

Credit Suisse has been shaken by a slew of financial scandals, the most notable of which are the failure of Greensill Capital, which had a portfolio worth $10 billion with Credit Suisse, and the loss of $4.7 billion as a result of the failure of family office Archegos Capital Management. In addition to this, legal action may be taken against the bank because of its part in the fall of supply chain financing company Lex Greensill’s corporate empire.

The Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) had previously issued a joint statement on March 15, stating that Credit Suisse met the requirements imposed on systemically important banks regarding their capital and liquidity, and that should it be required, the SNB would provide Credit Suisse with liquidity. But, the authorities now feel that the only option to avert a complete collapse in trust in the bank is for UBS to purchase Credit Suisse.

The announcement of this news comes after the United States-based investment firm BlackRock indicated in a tweet on March 18 that it is not interested in purchasing Credit Suisse.


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SWIFT Releasea Blueprint for Global CBDC Operation

As the majority of the world’s Central Banks are now developing or researching the prospects of Central Bank Digital Currencies (CBDCs), the Society for Worldwide Interbank Financial Telecommunications has detailed how these individual CBDCs can co-exist in a global setting.


As detailed by SWIFT‘s head of innovation Nick Kerigan, the trial involved as many as 14 central and commercial banks, including the Deutsche Bundesbank, Banque de France, Standard Chartered, UBS, and HSBC saw all these participating entities connect through a single hub.

“We believe that the number of connections needed is much fewer,” Kerigan said. “Therefore, you are likely to have fewer breaks (in the chain) and you are likely to achieve greater efficiency.”

The trial is billed to be followed by more detailed and specific testing in the coming months, with additional perspectives set to be investigated. 

SWIFT is an electronic system that allows banks all over the world to send information and payments to each other, following its 8-month investigation into the cross-border transaction capabilities of CBDCs concluded that a single viable central connection can suffice in keeping all of the individual e-fiat notes together.

While SWIFT has a very viable proposal to connect CBDCs the way it has connected financial players transacting using fiat and digital money, the body may have an unexpected rebuttal to deal with.

With the outbreak of the war between Russia and Ukraine, SWIFT blocked financial institutions from Russia in compliance with broader financial sanctions from Western watchdogs. This move may prevent some Central Banks from linking their CBDCs to the SWIFT system for any likely instance of censorship in the future.

While this fear remains a viable one, Kerrigan believes the focus for partners will be different. 

“Ultimately, what most central banks are looking to do is to provide us with a CBDC for the people, the businesses and the organisations in their jurisdiction,” he said, “So a solution that’s fast and efficient and that gains access to as many other countries as possible would seem to be an attractive one.”

Image source: Shutterstock


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Goldman Sachs Clients Want In on the Cryptocurrency Frenzy

According to a Bloomberg report, the ultra-rich clients of Goldman Sachs are interested in cryptocurrency. 

An Ever-growing Interest

The news agency quoted a recent survey from the American financial giant, which shows that almost half of the family offices interviewed are keen to add crypto to their investments.

Family offices specialize in managing the wealth and personal affairs of the wealthiest people in the world. The survey gathered responses from 150 family offices worldwide, with nearly one-fifth of those firms boasting up to $5 billion in assets under management. 

Goldman Sachs found that 45% of the participating firms are looking into crypto assets as a hedge against inflation, which the U.S. Treasury forecasts will skyrocket in the coming months. Moreover, the survey found that 15% of respondents already have exposure to cryptocurrencies.

According to Melina Flynn, the Global Co-Head of private wealth at Goldman Sachs, many family office clients want to invest in the digital asset ecosystem and its underlying blockchain technology. 

“The majority of families want to talk to us about blockchain and digital ledger technology. There are many who think that this technology is going to be as impactful as the internet has been from an efficiency and productivity perspective,” Flynn told Bloomberg.

JPMorgan Clients View Crypto as an Asset Class

In other positive adoption news, JPMorgan claims that many of its clients are demanding exposure to cryptocurrencies.

According to Mary Callahan Erdoes, an exec at the giant investment bank, more clients view bitcoin as a viable asset class. She added that the bank would continue offering crypto investment services to keep its user base happy. 

That said, Erdoes expressed concerns about the crypto market’s wild volatility, arguing that JPMorgan isn’t completely sold on bitcoin as an asset class per se. 

Back in 2017, the company’s CEO, Jamie Dimon, referred to bitcoin as a fraud. However, the banking giant has slowly softened its stance on bitcoin as demand for crypto continues to mount. 

JPMorgan is now reportedly planning to launch an actively managed Bitcoin fund, which would make it the largest bank to embrace crypto as an asset class.  

UBS Bank CEO Says Crypto is An Untested Asset Class

Not everyone is convinced that crypto has matured into a viable asset class, with some financial experts expressing doubts over the long-term value of digital assets. 

In a recent interview with Bloomberg, the CEO of Swiss-based UBS bank, Ralph Hamers, blasted crypto as an untested asset class, citing its extreme volatility. 

Hamers explained that although some UBS clients have expressed fear of missing out on the bitcoin gold rush, the banking institution plans to err on the side of caution and will not offer crypto actively.

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Crypto is an ‘untested asset category,’ says UBS CEO Ralph Hamers

Ralph Hamers, CEO of Swiss bank UBS, has said he does not fear missing out on crypto. Speaking to Bloomberg on Tuesday, Hamers said, “Clients are looking at different alternatives, and they hear about crypto, and there is a bit of a fear of missing out as well. They read it in the papers, but they also see the volatility.”

Commenting on the bank’s approach to providing exposure to crypto for its wealth management clients, the UBS CEO stated:

“We don’t offer it actively […] We feel that crypto itself is still an untested asset category.”

Back in May, reports emerged of UBS planning to offer crypto investments to rich clients. At the time, the proposed product was limited to a small fraction of the portfolios held by the bank’s wealth management clientele due to the volatility of cryptocurrencies.

However, in June, the bank warned customers to avoid crypto investments stating that the market will crash under pressure from regulators.

Meanwhile, the Swiss branch of Spanish banking giant BBVA already offers Bitcoin trading and custody solutions for clients in the country. Several Swiss banks, like the 170-year-old Bordier & Cie, are also offering crypto trading services.

Related: ‘Investors stay clear’: UBS warns regulators could pop ‘bubble-like crypto markets’

Hamers doubled down on the UBS’ reticence regarding crypto, stating that he does not have FOMO about the bank missing out on a few wealthy clients looking to invest in crypto.

While the UBS CEO appears not to be sold on crypto, banks in the United States are increasingly abandoning their previous anti-cryptocurrency stance and offering digital asset investment products.

As previously reported by Cointelegraph, NYDIG has partnered with a host of internet banking providers to allow several U.S. banks to offer Bitcoin (BTC) trading to their customers. In July, Bank of America reportedly created a crypto research team, dubbing cryptocurrency “one of the fastest-growing emerging technology ecosystem.”