Euromoney China AGM drops digital bond plans on bitcoin fears


The aftermath of China’s move to hit a major fintech where it hurts seems to be just beginning.

On November 13, a branch of China Construction Bank (AGM) at Malaysia’s offshore financial center in Labuan, canceled a $ 3 billion print of digital bonds, minutes before they were set to go live on the virtual Fusang Exchange.

An eight-day radio silence followed, before Fusang issued a statement saying that AGM, the world’s second-largest asset-based lender, had “decided not to proceed” with the scheme.

He added: “The exchange has accepted this decision, and announces immediate suspension of listing,” noting that it has “begun to return all investor funds”.

The AGM’s innovative fundraising scheme piqued the interest of investors, digital innovators and, for all the wrong reasons, China’s vigilant regulators.

It was an interesting deal from the beginning. The bank’s Labuan branch was the sole organizer and sponsor of the digital note listing, which wrapped the interior of a special-purpose vehicle called Longbond.

The short-term bonds, which would have paid investors an annual rate of 0.7%, are expected to mature in February 2021.

The Chinese public [might] thinks AGM accepts bitcoin, which is against the law


Investors seemed to have had no doubts about the bonds on a blockchain basis.