Hua Xia Bank, a publicly traded financial institution affiliated with the Chinese government, has issued tokenized bonds worth 4.5 billion yuan, equivalent to $600 million. This move, announced on Wednesday, seeks to streamline the bond auction process by reducing reliance on intermediaries. According to Sina, the bonds were issued by Hua Xia Financial Leasing, a subsidiary of Hua Xia Bank, which is a state-controlled commercial bank in China. These bonds are set to offer a fixed three-year yield of 1.84%.
The $600 million bond tranche was made available exclusively to holders of China’s digital renminbi, also known as the digital yuan. Tokenized bonds have the potential to minimize the number of intermediaries necessary for transaction clearing, thereby reducing settlement times and transaction costs.
China's stance on digital finance has been dynamic, particularly concerning stablecoins and cryptocurrencies. In 2025, the country opted to focus on developing a central bank digital currency (CBDC) and utilizing permissioned blockchain technology rather than engaging with stablecoins and cryptocurrencies, which have become significant on a global scale.
Earlier this year, China's approach to cryptocurrencies and stablecoins has been inconsistent. The government has alternated between implementing bans and easing regulations to allow private sector participation in the digital asset space. In early August, authorities clamped down on local brokers and financial firms that were organizing seminars on stablecoins. These entities were directed to cancel their events and cease publishing any related research, with regulators expressing concerns that stablecoins might facilitate fraudulent activities.
However, just a couple of weeks later, there were indications that China might legalize privately-issued yuan stablecoins to enhance the currency's role in international markets. Chinese tech giants like Alibaba, Ant Group, and JD.com viewed this as an opportunity to develop yuan-pegged tokens. Nonetheless, an official warning from Beijing in October regarding private stablecoins caused these plans to be shelved.
In September, the People’s Bank of China established a dedicated operations center for the digital yuan in Shanghai, aimed at overseeing cross-border settlements and fostering other blockchain initiatives.