OCBC launches $1.28b blockchain-powered commercial paper programme

This will fuel liquidity resilience.

OCBC has launched a S$1.28b (US$ 1b) digital US commercial paper (USCP) programme powered by blockchain technology.

According to the bank, the near-instant settlement is made possible by tokenised securities and funds being on-chain, allowing OCBC to receive funds within minutes.

“This capability is an important milestone in OCBC’s continued drive to bolster liquidity resilience,” it said. “In today’s uncertain geopolitical and macroeconomic landscape, the programme’s role as an alternative channel to tap the deep and liquid S$1.79t (US$ 1.4t) USCP market to quickly raise USD, is especially relevant.”

OCBC said the programme complements its S$ 32b (US$ 25b) USCP programme established in August 2011.

Besides issuance and settlement, the USCP’s record-keeping and servicing will also be done on-chain, making OCBC the first USCP issuer in the world to leverage blockchain across the securities’ entire lifecycle.

Given the immutable and transparent nature of blockchain, parties involved in the transaction can view and verify the same set of data in real-time. This in turn enhances trust and accountability as there is an auditable record of transactions.

J.P. Morgan’s Digital Debt Service application, built on its multi-asset tokenisation platform Kinexys Digital Assets, will facilitate OCBC’s digital USCP programme. J.P. Morgan will also act as sole dealer.

The first USCP tokenised issuance under the programme took place on 20 August. The six-month maturity notes were issued to an accredited institutional investor, with OCBC receiving the funds within minutes of the completed transaction.

Funds raised from the issuance and all other funds raised under the US$ 1bdigital USCP programme will be used by OCBC for general funding purposes.

US$1 = S$1.28