China-based Bank of Communications issues $1.3B in securities on proprietary blockchain

Chinese banking giant Bank of Communications has issued a total of 9.3 billion yuan (or around $1.3 billion) worth of residential mortgage-backed securities (RMBSs) via Jucai Chain – its proprietary blockchain network, CoinDesk reported on September 27 referring to a report from China Securities Times.

The bank was the main issuer, while China International Capital Corporation was the lead underwriter and book runner for the offering. Co-underwriters included the Industrial and Commercial Bank of China and China Merchants Bank.

In a press release dated September 18, Bank of Communications said that it officially launched its blockchain-based asset securitization platform in June this year. The following month, it completed the first phase that involved moving mortgage data of securities on to the blockchain.

In August, the bank said it conducted the RMBS due diligence through the platform.

“All parties in the [Jucai] chain [were able to] view and obtain relevant information in real-time to ensure the authenticity of the underlying assets and the effectiveness of disclosure,” the release said (loosely translated).

“The successful completion of the first phase of the “Juicai Chain” platform is a major innovative exploration of Bank of Communications's use of financial technology to optimize investment banking business. The “Growing Finance Chain” platform has effectively improved the transparency, standardization and standardization of ABS [asset backed securities] product operations, and has highlighted advantages in reducing product financing costs, improving project operation efficiency, and strengthening full-cycle risk management.”