Singaporean-based multinational bank OCBC has announced a solution for corporate entities seeking to diversify their assets using blockchain technology.
The Web 3-based solution involves tokenizing corporate assets and eventually selling them to accredited investors in the ecosystem, according to local reports. OCBC’s solutions differ from digital bonds by going a step further and offering “custom tokenization” for their corporate clients.
The blockchain-based tokenization solution will be available to corporate clients holding assets above SGD10 million ($7.3 million). Despite the steep figure, the offer has streaks of democratization rippling through a low minimum investment figure of SGD1,000 ($734).
Traditionally, a commercial bank offering corporate bonds requires a minimum investment of SGD250,000 ($183,700) and has strict durations and settlement methods. OCBC Global Markets Head Kenneth Lai clarified that the bank’s offers would allow investors to select the duration of the tokenized bonds and the periodic interest payments for bondholders.
Lai added that the first-of-its-kind solution for the Singaporean market will offer several benefits for players in the financial space. The most obvious one will be the deconcentration in bond holdings stemming from their fractionalization, improving accessibility, liquidity, and risk management.
On the investors’ side, fractionalization allows them to liquidate portions of their bond holdings to finance corporate operations while maintaining their participation.
OCBC, the second largest commercial bank in Singapore, looked inward in the rollout of the solution to lean on its internal tokenization capabilities. Going forward, the financial giant says it will expand the scope of the offering to accommodate a broad spectrum of tokenized assets.
“We are proud to have developed bespoke tokenized bonds via our asset tokenization platform,” said Lai. “This innovation provides flexible and liquid investment alternatives, bringing tangible benefits to our customers.”
The rapid pace of tokenization
Singapore is spearheading tokenization in Southeast Asia as it jostles for the top spot with Hong Kong. In 2024, SBS and UBI teamed up to launch tokenized securities under Project Guardian, the latest in a long line of offerings in the ecosystem.
Citi (NASDAQ: C)-backed BondbloX has been eyeing tokenization in Singapore for years with Moody, joining Project Guardian to assess the potential risks to the local financial system.
“As these capabilities evolve, the potential for tokenization to reshape how assets are traded and managed globally is increasingly evident, promising a future where digital tokens unlock new economic efficiencies and opportunities,” said Moody’s Head of Strategy, Rajeev Bamra.
Turkey works with ‘crypto’
In other news, Turkish commercial bank Garanti BBVA has unveiled a new service that allows its customers to access digital assets in accordance with extant local and regional legislation.
The offering will be spearheaded by the bank’s newly minted digital asset arm, Garanti BBVA Kripto, which is equipped with custodial capabilities. Garanti BBVA has partnered with Spanish local digital currency exchange Bit2me for trade execution.
The collaboration is expected to provide liquidity for trades and partially fulfill existing regulatory requirements. Turning to Spain for a digital asset service provider is not a flash in the pan since Garanti BBVA is a subsidiary of the Spanish financial powerhouse Banco Bilbao Vizcaya Argentaria (BBVA).
Under the provisions of the European Union’s Markets in Crypto Assets (MiCA) laws, traditional financial institutions can offer digital assets to customers after obtaining approval from local regulatory authorities.
With this latest development, retail customers will be able to buy, hold, and sell digital assets without leaving Garanti BBVA mobile banking platforms. For institutional investors, it remains unclear whether or not Garanti BBVA will roll out a similar offering for the demographic.
The move follows a spike in the number of digital asset investors in Turkey, with impressive figures placing the country as the third-largest by adoption metrics. Investors are swarming the emerging asset class in droves, keen to hedge their wealth from galloping inflation rates while the perks of improved cross-border transactions draw others.
Bit2me CEO Leif Ferreira disclosed that Bit2me will not be resting on its laurels following its partnership with Garanti BBVA. Instead, the exchange has its sights set on providing exchange services to a raft of commercial banks across Europe, noting that 2025 will be a watershed year for the asset class.
“2025 marks the starting gun for banks to offer crypto buy/sell services,” said Ferreira. “We are collaborating with over 50 financial institutions to help them launch their crypto products this year.”
Merging the old and the new
As digital assets move mainstream, several commercial banks are extending the scope of their services to offer clients digital currencies. Empowered by MiCA, these banks are rolling out digital asset services to hold onto their market share in the face of stiff competition from new digital banks.
Apart from offering digital asset services to customers, several banks are adding emerging assets to their balance sheets, a departure from traditional investment strategies. The European Banking Authority (EBA) has since rolled out new standards for commercial banks to comply with in handling digital assets.
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