The Bank of China’s investment banking arm, BOCI, has issued digital structured notes worth 200 million Chinese yuan ($28 million) on the Ethereum blockchain. This is the first time a Chinese financial institution has issued a tokenized security in Hong Kong.

The digital notes were originated by UBS, a global investment banking company, for its client in the Asia-Pacific region. BOCI’s deputy CEO, Ying Wang, said that the collaboration with UBS aims to simplify and innovate the digital asset markets and products for customers in Asia Pacific.

UBS has been expanding its tokenization efforts across various asset classes, such as structured products, fixed income, and repo financing. In December 2022, UBS issued a $50 million tokenized fixed-rate note under English and Swiss law on a permissioned blockchain.

Hong Kong has been embracing blockchain and cryptocurrency in its financial sector. The region opened crypto exchange access for retail users on June 1 and plans to establish a stablecoin regulation framework within a year. Hong Kong also issued a green bond tokenized on Goldman Sachs’ protocol in February and launched two crypto futures exchange-traded funds in December 2022.