Commercialization of Tokenized Assets: OCBC Brings Tokenized Bonds to Corporate Accredited Investors

Accredited corporate investors (corporate AIs) can now buy special tokenised bonds from OCBCthe Singapore-based bank, as it looks to commercialize and scale the use of tokenized assets.

the tokenized bonds which refers to investment grade bonds, structured based on the client’s desired tenor and yield. It is then generated and transferred to the client’s wallet created by OCBC’s asset tokenization platform. This is the second commercial use case using the OCBC blockchain infrastructure developed in 2022. The first commercial use case is a partnership with LTA to pilot a blockchain-based conditional payment solution for of construction projects in 2024.

Corporate bonds usually have a high minimum transaction size of S$250,000, which contributes to concentration risk. Tokenization addresses this as it allows for fractional ownership – an AI company client can subscribe to tokens in S$1,000 denominations. Corporate AIs are corporations with net assets exceeding S$10million.

This in turn facilitates the construction of more different portfolios with different properties. Clients can also liquidate investments in S$1,000 denominations to meet cashflow requirements.

OCBC’s asset tokenization platform

OCBC’s asset tokenization capability streamlines the entire lifecycle from creation and mining to transfer of ownership and custody, and redemption through token burning. It has been progressively expanded beyond fixed income assets. This will enable OCBC to tokenise a range of assets for its clients, including structured products and funds.

Kenneth SufferOCBC’s head of global markets said: “As an industry, we have made significant strides in understanding and recognizing the huge potential of tokenized assets. As we shift our focus to commercialization, we are proud to have created custom tokenized bonds through our asset tokenization platform. This innovation provides flexible and liquid investment alternatives, bringing tangible benefits to our customers. Leveraging our asset tokenization capabilities, we will gradually expand our offerings to include other types of tokenized assets.

Success story

OCBC completed the inaugural transaction for a mid-sized manufacturing client in Singapore in November 2024, creating a tokenized bond with a tenor of less than one year. It meets the needs of the client as they intend to pivot from fixed deposits and diversify their investment portfolio. Some corporate AIs that favor fixed deposits in a high-interest rate environment, may also see tokenized bonds as a viable alternative as interest rates fall.

The transaction is settled within the same business day from debiting the client’s bank account to the transfer of digital tokens from OCBC to the client’s wallet which is custodized by OCBC. Traditional bond transactions typically take five days for settlement. This is the client’s first use of tokenized assets.