Chinese Huaxia Bank Issues $637 Million in Blockchain Bonds via Digital Yuan

Huaxia Bank, one of China’s major state-owned banks, has completed one of the country’s first commercial bond issuances fully recorded on a blockchain network and settled entirely in digital yuan. The 4.5 billion yuan offering, equivalent to approximately $637 million, was conducted through the bank’s commercial shipping finance subsidiary, Huaxia Financial Leasing. Investors subscribed and paid using only China’s central bank digital currency, marking a significant step in the integration of blockchain with the nation’s rapidly expanding CBDC ecosystem.

The bank announced the milestone on its official social media channels, with details later confirmed by the financial newspaper Sina Finance. According to Huaxia, the entire issuance process from subscription to settlement was captured in real time on the blockchain ledger. This approach creates an immutable record that allows all parties to verify transaction details at any point, a feature the bank highlighted as a key advantage over traditional bond issuance methods.

Streamlined Process Signals Broader Adoption Potential

Huaxia emphasized that combining blockchain with digital yuan payments removed several layers of intermediaries typically involved in bond sales. By automating book-building and settlement, the bank was able to gauge demand more efficiently and finalize terms faster than in conventional offerings. Originally, the issuer planned to raise at least 3 billion yuan ($425 million) while keeping an additional 1.5 billion yuan in reserve in case of oversubscription. Strong investor interest ultimately forced Huaxia Financial Leasing to release the full amount, demonstrating robust appetite for digitally native fixed-income products.

The three-year bonds carry an annual coupon of 1.84% and are scheduled to mature in 2028. Huaxia described the transaction as a “national first” that fundamentally upgrades the speed and transparency of its debt capital market operations. Although the bank did not name the specific blockchain platform, we noted that Chinese financial institutions almost exclusively rely on permissioned networks, in line with the country’s strict regulatory stance on public cryptocurrencies.

China’s digital yuan program, officially launched as a pilot in April 2021, continues to expand at a brisk pace. The People’s Bank of China recently reported that cumulative transaction volume has surpassed 14 trillion yuan, roughly $2 trillion, across 26 designated pilot cities and regions. More than 225 million individual digital wallets have been opened to date, underscoring growing public familiarity with the CBDC.

Privacy and freedom advocates warn that widespread adoption of CBDC's could establish the potential for unprecedented government surveillance, given that every transaction can be monitored in real time. Others point out that a fully digital fiat currency gives authorities far greater ability to impose spending controls, negative interest rates, or even selective transaction freezes compared with physical cash or conventional bank deposits. These concerns aren't unprecedented, as stablecoins like USDT and others have already frozen, blacklisted, and tracked their blockchains in cooperation with government entities.

While the digital yuan itself does not operate on a blockchain, its use as the sole settlement currency in this bond sale highlights a pragmatic blend of centralized digital money and distributed ledger technology. The Huaxia issuance can be seen an early template for future corporate debt offerings, potentially encouraging other Chinese banks and enterprises to explore similar blockchain-enhanced financing structures in the coming years.