ICMA publishes DLT Bonds Reference Guide
11 December 2024 The International Capital Market Association (ICMA) today publishes new reference guidance for Distributed Ledger Technology (DLT) based debt securities.
A copy of the reference guide can be found here.
The guide, produced by ICMA’s DLT Bonds Working Group, and authored by Gabriel Callsen, Senior Director for FinTech and Digitalisation at ICMA, highlights considerations for the end-to-end lifecycle of DLT-based debt securities. It is designed for market practitioners, including both traditional DCM and digital asset functions, as well as a broader audience of market stakeholders. It comprises over 50 practical questions and serves as a reference point across the lifecycle of a DLT-based debt security.
The guidance is the result of collaboration within the ICMA DLT Bonds Working group. The group provides a forum for discussion on how to support liquidity in DLT-based bonds, focusing on interoperability aspects, cash on ledger, and legal and regulatory considerations, with a view to providing recommendations or market guidance. The group also seeks to raise awareness and ‘demystify’ blockchain bonds through FAQs, workshops, webinars and further educational materials. The stakeholders involved also respond to relevant consultations and collaborate with regulatory authorities.
Announcing the launch of the DLT Bonds Reference Guide, Bryan Pascoe, Chief Executive of ICMA said, “The DLT Bonds Reference Guide is a collaborative effort between stakeholders across the value chain of international bond markets and encompasses a set of practical considerations for the issuance, trading, settlement and distribution of tokenised debt securities."
"In light of the dynamic nature of this market segment, we believe the Reference Guide will provide greater clarity to a broad range of market practitioners and firms’ internal functions, helping them to navigate the opportunities and risks in global markets."
Christoph Hock, Head of Tokenisation and Digital Assets at Union Investment, member of the ICMA board and chair of ICMA’s DLT Bonds Working Group added, “The token economy, and DLT-based bonds in particular, have become increasingly more relevant in recent months. Where currently we see a high degree of fragmentation across the value chain, we look forward to greater collaboration and standardisation, which will play a key role in further building the token universe. With its DLT Bonds Reference Guide, ICMA and all involved parties have made a great step in this direction.”
