Hua Xia Bank, a public financial institution linked to the Chinese government, issued 4.5 billion yuan ($600 million) in tokenized bonds on Wednesday, aiming to reduce clearing friction by removing middlemen from the auction process.
According to Theirsonchain government bonds were issued by Hua Xia Financial Leasing, a subsidiary of Hua Xia Bank, a state-controlled commercial bank in China. The bonds offered holders a three-year fixed yield of 1.84%.
The $600 million bond tranche was auctioned exclusively to holders of China’s digital renminbi, also known as the digital yuan.
Tokenized bonds can reduce the number of intermediaries needed to settle a transaction, shortening settlement times and reducing transaction costs.
In 2025, China erred on the side of stablecoins and cryptocurrencies, opting instead to develop a central bank digital currency (CBDC) and state-sanctioned use of permissioned blockchain technology, as digital assets become geostrategically important.
Related: China reaffirms crypto ban after noting “speculation has resurfaced”
Mixed signals coming out of China as crypto becomes more relevant
The Chinese government continues to reverse course toward stablecoins and cryptocurrencies, alternating attempts at bans and easing regulations to allow private companies to operate in the space.
In early August, China cracked down on local brokers and financial firms holding stablecoin seminars in the country and instructed those firms to cancel all planned events and stop publishing research on the topic.
At the time, Chinese regulators were concerned that stablecoins could be a vector for fraudulent activity in the country, according to Bloomberg.
Less than two weeks later, reports it has emerged that the Chinese government is considering legalizing privately issued yuan stablecoins to boost the presence of fiat currency in foreign exchange markets.
Chinese tech companies including Alibaba, Ant Group and JD.com saw this as a green light to start developing yuan-linked tokens, but a warning from Beijing in October about private stablecoins put those plans on hold.
The People’s Bank of China, the country’s central bank, set up a digital yuan operations center in September. The hub, based in Shanghai, will oversee cross-border settlements and the development of other blockchain-related initiatives.
Magazine: China Officially Hates Stablecoins, DBS Trades Bitcoin Options: Asia Express
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