digital bonds - Pwim.Net

Bank of Thailand Completes Digital Bond Issuance With Blockchain

Thailand’s Central Bank, the Bank of Thailand has leveraged the power of blockchain technology to launch a platform for government bond savings issuance.

Per an official press release, the Bank of Thailand noted that the blockchain-based platform will help to improve investor’s buying experience, improve operational efficiency, and reduce the overall cost of operations.

The platform dubbed DLT Scripless Bond Project is a collaborative effort involving seven other institutions including the Public Debt Management Office, Thailand Securities Depository Co., Ltd, Thai Bond Market Association, as well as selling-agent banks, including Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank. As reported, about Fifty billion baht of government savings bonds were sold out in a week following the launch of the platform.

The Bank of Thailand stated:

“The new infrastructure successfully went live by supporting Government Savings Bonds: “1 Baht Bond” and “Moving Forward”. The total issuance of 50 billion THB has completely allocated to the investors sooner than expected.In the next phase, the infrastructure will expand to support all different government bonds.”

Thailand’s Blockchain Poise Paying Off

Thailand is one of the countries in Asia with an aggressive drive to explore the potentials of blockchain technology. The country, advancing with the development of its Central Bank Digital Currency began testing the CBDC with large businesses back in July, ahead of its official debut.

Thailand’s experimentation with blockchain initiatives also took a deep dive when the country unveiled its plans to overhaul the traveling industry with the issuance of blockchain-based virtual visas. As Blockchain.news reported, the plans by Thailand to utilize blockchain technology to overhaul the travel industry was projected to enhance the system to speed up the application process and protect the confidential information of the tourists.

With the official launch of a blockchain-based Digital Bond Issuance platform, Thailand has complimented its strides in seeing the improved advances of blockchain technology in the country.

Ethereum Achieves Record-High of $2,700 as EIB Announces Sale of Digital Bond on Ethereum Blockchain

The European Investment Bank (EIB) announced a plan to sell a “two-year digital bond” on the Ethereum blockchain network with a total value of up to 100 million euros.

An analyst tweeted that the issuance of digital bonds will be led by Goldman Sachs, Santander, and Société Générale.

Based on a Reuters report, SFOX cryptocurrency broker Danny Kim believes that the issuance of EIB digital bonds will trigger a bullish trend as Ethereum’s supply decreases. He said:

“The amount of Ethereum sitting on exchanges continues to drop lower and has been the lowest in the past year. With less supply on exchange available, there’s less likely a chance of a major sell-off.”

Ether has continued to rise for three consecutive days. Stimulated by this news, the cryptocurrency hit a record high of $2,718. At the time of writing, the price of ETH has retraced and is trading at $2,617.

According to Coinmarketcap, in terms of market capitalization, Ethereum, the world’s second-largest digital asset of $301,838,265,041, has increased by 13.04% in the past 7 days.

Currently, the average transaction or gas fees for the Ethereum network have hit a 3-month low, below $10. The decline in gas fees and the revival of the Decentralized Finance (DeFi) market have also contributed to the surge in price.

Source: DeBank

The popularity of DeFi protocols built on the Ethereum blockchain made the gross value locked and net value locked of Ethereum smart contracts reach a record high of $73.19 billion and $55.12 billion respectively.

Source:Bybt

Based on the Bybt data, most sell options are concentrated at around $2,400 strike prices. The call options are valued at around $2,560.

At the same time, the call/put ratio is 1.36, which indicates that there are more investors who are enthusiastic about Ether’s market outlook, making Ethereum more bullish than bearish.

HSBC to Issue Digital Bonds to Institutional Investors through Tokenization Platform

Multinational banking giant HSBC has revealed plans to issue digital bonds to corporates and financial institutions through its new proprietary tokenization platform called HSBC Orion.

By harnessing the power of distributed ledger technology (DLT), HSBC Orion will enable token-based transactions. As a result, attain digital delivery versus payment.

Per the report:

“The platform leverages blockchain technology as a ‘single source of truth,’ whereby asset and settlement tokens sit natively and securely on the platform’s ledger.”

Therefore, HSBC Orion is eyeing the first-ever GBP tokenized bond issuance in accordance with Luxembourg law.

Once rolled out, HSBC Orion will be expanded to other asset classes and locations.

John O’Neill, HSBC’s global head of digital asset strategy, markets, and securities services, pointed out:

“Digital assets are a fast-growing part of financial markets. Our clients are demanding solutions that can deliver the benefits of tokenization within a trusted and secure environment.”

Since tokenization presents opportunities for fixed income, like improved operational performance and faster processing, HSBC Orion is deemed a stepping stone towards this objective.

O’Neill added:

“We are excited to be meeting this growing need by launching HSBC Orion, our strategic platform for tokenized assets. We plan to use HSBC Orion to facilitate further digital bond issuance and expand its usage to other products in 2023.”

For his part, Zhu Kuang Lee noted that HSBC Orion would offer a secure and trusted backbone for the issuance of tokenized bonds.

The chief digital, data, and innovation officer at HSBC Securities Services said:

“We believe that tokenization solutions complement and expand HSBC’s best-in-class custody and asset servicing capabilities, and we plan to widen our support for digital assets in 2023.”

Meanwhile, HSBC recently conducted a blockchain-based trade finance transaction between SAIC Motor, a Chinese car manufacturer, and Taajeer Group, the exclusive agent for MG cars in Saudi Arabia, Blockchain.News reported.

HSBC acknowledged the use of DLT had the potential to revamp the trade finance sector by slashing transaction times to less than 24 hours from the present five to ten days.

SEB and Credit Agricole launch digital bond platform on blockchain

Skandinaviska Enskilda Banken (SEB) and Credit Agricole Bank have jointly launched a new digital bond platform called “so|bond.” The platform is built on blockchain technology and enables institutional clients to issue, trade and settle bonds digitally. The platform is set to provide a more efficient and secure process than traditional methods, enhancing the clients’ experience.

The so|bond platform is designed to use a validation protocol called “Proof of Climate awaReness” to minimize its environmental footprint while incentivizing participating nodes to improve their environmental impact. Each node will be remunerated according to a formula linked to its climate impact, with the lower the environmental footprint, the larger the reward. This protocol enables the platform to consume energy comparable to non-blockchain systems, making it an eco-friendly solution.

The so|bond platform is the first use case for the “Proof of Climate awaReness” protocol, which was developed by the French-based IT provider Finaxys. The protocol’s innovative approach to the blockchain infrastructure and securities market allows it to play a pivotal role in green and sustainable finance, aligning with Credit Agricole’s Societal Project.

Romaric Rolleti, head of innovation and digital transformation at Credit Agricole, stated that the bond blockchain platform is part of a larger plan for the bank’s digital transformation. The platform’s innovative approach to the blockchain infrastructure and securities market, coupled with the strong commitment to green and sustainable finance, is at the center of Credit Agricole’s Societal Project. This initiative joins many other efforts to explore the use of blockchain, smart contracts, and the Internet of Things for a global environmental cause.

The so|bond platform launch comes amid growing interest in green and sustainable finance. In October 2022, the Bank for International Settlements, the Hong Kong Monetary Authority and the United Nations Climate Change Global Innovation Hub presented the results of their Genesis 2.0 initiative — two prototypes of tokenized green bonds. With so|bond, SEB and Credit Agricole have demonstrated their leadership in addressing environmental concerns while leveraging blockchain technology for a more efficient and sustainable bond market.