OCBC Pioneers Tokenised Bonds in Singapore, Ushering a New Era of Investment Flexibility

OCBC has achieved a significant milestone, becoming the first bank in Singapore to offer bespoke tokenised bonds to corporate accredited investors (AIs). These innovative financial instruments are tailored to meet clients’ specific investment needs in terms of tenor and yield, making use of OCBC’s proprietary asset tokenisation platform.

The tokenised bonds are issued in denominations of S$1,000, a stark contrast to the traditional corporate bond minimum of S$250,000. This innovation allows corporate investors to diversify their portfolios more effectively while addressing the issue of concentration risk.

This latest development is part of Singapore’s broader push to commercialise and scale the use of tokenised assets in the financial sector. Tokenisation involves the digital representation of physical or financial assets on a blockchain, enabling fractional ownership and increased liquidity. By making such assets more accessible, tokenisation is revolutionising traditional investment paradigms, empowering businesses to manage their portfolios with greater flexibility.

OCBC’s asset tokenisation platform streamlines the entire lifecycle of tokenised assets. From the creation and minting of digital tokens to ownership transfer, custody, and eventual redemption through token burning, the platform provides an end-to-end solution. This marks a significant step forward in OCBC’s journey to harness blockchain technology for commercial purposes.

Fast and Flexible Transactions

The bank successfully completed its first bespoke tokenised bond transaction in November 2024 for a mid-sized manufacturing client based in Singapore. The client, who was looking to pivot away from fixed deposits and diversify its portfolio, subscribed to a tokenised bond with a tenor of less than a year. The transaction was settled within the same business day, demonstrating the platform’s efficiency. By comparison, traditional bond transactions typically require five days for settlement.

The faster settlement process is particularly advantageous for corporate investors, as it provides greater agility in managing cash flow. Investors can also liquidate their tokenised investments in denominations of S$1,000, enabling them to meet cashflow requirements with minimal hassle.

Kenneth Lai, OCBC’s Head of Global Markets, described the innovation as a significant leap forward for the financial sector:

“As an industry, we have made significant strides in understanding and recognising the vast potential of tokenised assets. As we shift our focus towards commercialisation, we are proud to have developed bespoke tokenised bonds via our asset tokenisation platform. This innovation provides flexible and liquid investment alternatives, bringing tangible benefits to our customers.”

Building on Blockchain Success

OCBC’s venture into tokenised bonds builds upon its earlier success in blockchain technology. The bank first launched its blockchain infrastructure in 2022 and deployed its inaugural commercial use case in 2024, partnering with Singapore’s Land Transport Authority (LTA) to pilot a blockchain-based conditional payment solution for construction projects.

The latest initiative is an evolution of OCBC’s blockchain journey, demonstrating its commitment to leveraging advanced technology to address real-world challenges. The bank is not stopping at tokenised bonds; its asset tokenisation platform will eventually expand to include other asset types such as structured products and funds.

Meeting the Needs of Corporate Investors

Tokenisation is especially relevant in a high-interest rate environment where corporate investors have historically favoured fixed deposits for their cash management needs. As interest rates begin to fall, tokenised bonds provide a compelling alternative, offering the potential for higher yields while maintaining flexibility and liquidity.

OCBC’s bespoke approach to tokenisation allows corporate investors to structure investments that align closely with their specific objectives. Whether clients are seeking to diversify their holdings or improve cash flow management, the platform delivers a tailored solution that integrates seamlessly with their broader investment strategies.

Setting a Benchmark for the Industry

This launch underscores OCBC’s position as a leader in financial innovation within the region. The bank’s commitment to advancing the use of blockchain and tokenisation technologies aligns with Singapore’s vision of becoming a global hub for digital assets.

As the second-largest financial services group in Southeast Asia, OCBC continues to leverage its expertise to redefine traditional banking services. With its latest venture into tokenised bonds, the bank is setting a benchmark for the industry, paving the way for broader adoption of tokenised assets in the corporate sector.