Applications of distributed ledger technology, artificial intelligence/machine learning, big data analytics or cloud computing have significant potential to alter the lifecycle of bonds, from issuance, trading to settlement, and impact the functioning of financial markets.
The following compendium is designed to provide a non-exhaustive overview of selected practical examples in fixed income primary, secondary, repo and collateral markets. It is based on publicly available information, notably press releases of executed proofs of concept or planned developments. This compendium is provided by ICMA for information purposes only and ICMA does not endorse any of those firms and solutions listed below.
Relevant firms that have made similar public announcements and wish to be included in this compendium are very welcome to get in touch. Please contact Gabriel Callsen (see below).
Important notice:
The information and content provided herein have been obtained from public sources. This information is provided by ICMA for information purposes only and should not be relied upon as legal, financial or other professional advice. While the information contained herein is taken from sources believed to be reliable, ICMA does not represent or warrant that it is accurate or complete and neither ICMA nor its employees shall have any liability arising from or relating to the use of this publication or its contents.
10 December 2024: AXA IM continues its initiatives to test blockchain technology as part of ECB’s exploratory work on central bank money settlement
AXA Investment Managers (AXA IM) today announces that it has successfully participated in two market initiatives based on blockchain infrastructure and using the Banque de France's (BdF) tokenised cash solution. These two experiments are part of the Call for Expression of Interest launched in December 2023 by the European Central Bank (ECB) to experiment on new technologies for settlement of wholesale financial transactions in digital central bank money (CeBM).
The success of these experiments is a further signal that blockchain technology is well on the way to achieving the level of maturity and security needed to positively disrupt financial market processes, improving the client experience by accelerating the treatment of financial transactions. The first experiment involved a €3 million investment by AXA IM, on behalf of AXA France, into a digital sovereign bond issued by the Republic of Slovenia. The transaction was executed on BNP Paribas’ “Neobonds” tokenisation platform (integrated within BNP Paribas Global Markets’ infrastructure), with settlement on T+1 and using DL3S, the Banque de France’s DLT . The second experiment consisted in executing a fund share subscription of €1 million from Generali into AXA Court Terme with instant settlement process using digital CeBM via IZNES blockchain platform.
25 November 2024: Crédit Agricole CIB and CACEIS announce the successful completion of their joint experiment with the European Central Bank part of the Eurosystem's exploratory work on wholesale Central Bank Digital Currency (wCBDC)
The experiment focused on deposit accounts held on-chain by several banks with payments using a tokenized correspondent banking model and settlements conducted using wholesale CBDC (wCBDC). It aimed at demonstrating the feasibility of a platform-less blockchain protocol, proving that transactions can be securely settled without the need for a centralized platform operator. This experiment also confirmed the feasibility and merit of a unified ledger of commercial bank money for the banking industry, aimed at enhancing efficiency and reducing settlement risks.
15 November 2024: EIB launches new digital bond as part of the Eurosystem Exploratory Work
On November 15, 2024 the EIB priced its fifth digital bond, a landmark offering that advances the digitalization of capital markets and underscores the EIB’s commitment to technological innovation. The issuance is a EUR 100 million fixed-rate note due 19 November 2027. Following the announcement on October 23, this transaction represents the first EIB digital bond issuance in the context of the Eurosystem exploratory work on new technologies for wholesale central bank money settlement. The issuance is in line with the EIB’s commitment to provide expert input and keep the Eurosystem up to date with advances in the use of distributed ledger technology (DLT) and other new technologies in wholesale financial markets.
8 November 2024: IMI CIB develop components of inaugural issuance of digital euro commercial paper
The IMI Corporate & Investment Banking Division of Intesa Sanpaolo, developed the components of the Bank’s inaugural issuance of digital euro commercial paper, occurred on 8 November 2024, with a nominal value of EUR 10M and a ten-day maturity. The transaction, supported by the New Technologies for Wholesale Settlement Contact Group (NTW-CG), was carried out as part of the second wave of the Eurosystem trials aimed at exploring new technologies for Wholesale Central Bank Money Settlement.
https://imi.intesasanpaolo.com/en/news/2024/inaugural-digital-ecp-intesa-sanpaolo/
7 November 2024: Caisse des Dépôts successfully completed its first issuance of the EUR 100 million digitally native notes
The issuance of the EUR 100 million 3.33% digitally native notes due 7th November 2034 by Caisse des dépôts et consignations was carried out using the digital financial market infrastructure ("D-FMI"), the distributed ledger technology-based component of the securities settlement system operated by Euroclear, for the creation of the digitally native notes, and the Banque de France's cash distributed ledger technology (DL3S), for the cash leg of the issuance.
26 September 2024: HSBC issues digital note using DLT via its Orion platform
HSBC has issued a HK$1 billion (US$128 million equivalent) 1-year digital note using DLT via its Orion platform, marking the first English law digital bond and the first digital note by a Hong Kong company to be listed on the Hong Kong Stock Exchange.
23 September 2024: Eurosystem's exploratory work on DLT platforms progressing
The European Central Bank published an article with updates of the Eurosystem’s exploratory work on DLT platforms. A total value of €532 million has been successfully settled in more than 50 transactions involving 15 different financial firms and central bank since May 2024. In total, 60 financial firms from nine euro area countries and four central banks are participating in the Eurosystem’s exploratory work. The trials – transactions including actual settlement in central bank money – have covered nine use cases, with a particular focus on the primary distribution of bonds to investors on a delivery-versus-payment basis. Among other accomplishments, the trials have seen the first euro area sovereign bond issued natively on a distributed ledger. Furthermore, the experiments – conducted with mock settlement – have covered five additional use cases and provided further learning opportunities for the Eurosystem.
https://www.ecb.europa.eu/press/intro/news/html/ecb.mipnews240923.en.html
4 September 2024: Siemens successfully issue a digital bond in accordance with Germany’s Electronic Securities Act
Siemens has again issued a digital bond in accordance with Germany’s Electronic Securities Act (Gesetz über elektronische Wertpapiere, eWpG). Following the successful issuance of its first digital bond last year, the company is thus continuing to play a pioneering role in the application of the latest technologies on the capital markets. By using blockchain technology once again, Siemens is underscoring its claim to continuously develop digital solutions for the financial markets. In issuing the bond, the company is supporting the trials by the Eurosystem and the Bundesbank in particular, that are aimed at testing blockchain technology for the digital financial market.
29 August 2024: KfW successfully tests digital bond with blockchain-based processing in central bank money
KfW has issued a digital bond in the form of a crypto security in accordance with the German Electronic Securities Act (eWpG) and for the first time successfully used blockchain technology to process the transfer of central bank money. The transaction took place as part of the European Central Bank’s (ECB) exploration phase to test new technologies for the processing of distributed ledger technology (DLT)-based financial market transactions in central bank money. With its bond, which was settled on 28 August 2024 – and thus only one day after pricing – KfW tested the monetary processing of the issue of a blockchain-based digital bearer bond using the Deutsche Bundesbank’s Trigger Solution. For processing in central bank money, the project participants used DLT and smart contracts and thus enabled the automated exchange of securities and payment amounts (also known as delivery versus payment).
https://www.kfw.de/About-KfW/Newsroom/Latest-News/Pressemitteilungen-Details_820544.html
28 August: Natixis Pfandbriefbank issues first digital registered covered bond on the SWIAT blockchain
Natixis Corporate & Investment Banking, via Natixis Pfandbriefbank, issued its first digital registered covered bond on the SWIAT blockchain in Germany. With an issuance volume amounting to EUR 100mn, DekaBank was an investor an also acted as registrar and paying agent. SWIAT, a Frankfurt-based fintech and joint venture between DekaBank, LBBW and SC Ventures, provided the software for the tokenization of the registered covered bond and the private, permissioned and Basel-compliant blockchain as a settlement network*. Leveraging on its Tech Hub, Natixis CIB is committed to supporting clients in their tech transformation by providing expertise and solutions, particularly in digital assets. The focus is on helping issuers and investors navigate the digital assets space and being a key partner to move forward in tokenization.
A private blockchain network like SWIAT is also a decentralised peer-to-peer network. However, it is coordinated by an organisation. The organisation oversees access to the network and carries out joint protocol changes with the participants. Permissioned means that only authorised participants can take part in the network and its transactions.
23 August 2024: Asian Infrastructure Investment Bank issues its first Digitally Native Note
12 August 2024: Germany's largest development bank KfW selects Boerse Stuttgart Digital as infrastructure partner for its new blockchain-based digital bond
Boerse Stuttgart Digital, the leading infrastructure provider for cryptocurrencies and digital assets in Europe, now provides the technical infrastructure for KfW, one of the world’s leading promotional banks, for its new blockchain-based digital bond. Boerse Stuttgart Digital manages wallets and secures private keys throughout the issuance and redemption processes of the crypto security planned by KfW in the coming weeks in accordance with the German Electronic Securities Act (eWpG). By expanding its range of services to include wallet provision and private key security in relation to tokenized securities, Boerse Stuttgart Digital strengthens its position as a fully regulated one-stop-shop in the field of cryptocurrencies and digital assets.
en_20240812_kfw-selects-boerse-stuttgart-digital-as-infrastructure-partner.pdf
2 August 2024 - First Berlin Hyp Blockchain Pfandbrief issued successfully
Berlin Hyp has become the first bank to issue a digital Mortgage Pfandbrief structured on the basis of the German Electronic Securities Act and using blockchain technology. The crypto debt security has a total size of €100 million, a coupon of 2.75% and a term of three years. The digital Pfandbrief is expected to receive an Aaa rating from Moody’s. The Pfandbrief issuance is executed on a private and permissioned blockchain from SWIAT GmbH. SWIAT is a company based in Frankfurt am Main that develops software for financial market infrastructures. Its shareholders include DekaBank and LBBW, the two banks Berlin Hyp mandated as lead managers for the transaction. The settlement date is 6 August 2024.
26 July 2024 - The Republic of Slovenia successfully issues its inaugural digital bond, marking a pioneering moment as the first such transaction by an EU sovereign and among the first worldwide
This EUR €30 million bond, with a 3.65% fixed coupon, has a four-month maturity. Issued under the European Central Bank's (ECB's) wholesale central bank money (CeBM) settlement experimentation programme, the bond's settlement was performed on-chain through the Banque de France’s (BdF) DL3S interoperable and tokenized cash solution.
BNP Paribas acted as Global Coordinator and Sole Bookrunner, and also operated the DLT platform, Neobonds, using Digital Asset's Daml and Canton blockchain. Governed by Slovenian law, this initiative underscores Slovenia's commitment to integrating new technologies in central government debt management and the broader financial market. The Republic anticipates significant growth in the importance of distributed ledger technology (DLT) in the coming years.
18 July 2024 - Cassa Depositi e Prestiti Spa (CDP) successfully issues its first Digital Bond on Blockchain Intesa Sanpaolo fully underwrites the transaction
This EUR €25 million bond, with a 3.633% fixed coupon, has a four-month maturity. Issued under the “FinTech” decree-law, the transaction uses Distributed Ledger Technology (DLT) and was part of the European Central Banks (ECB's) trial for new settlement solutions. Cash flow settlement was conducted through the Bank of Italy's Target Instant Payment System (TIPS). The blockchain used was Polygon, and the securities are governed by Italian law.
2 July 2024 - KfW issues its first blockchain-based digital bond under the German Electronic Securities Act (eWpG)
KfW issued its first blockchain-based digital bond in the form of a crypto security in accordance with the German Electronic Securities Act (eWpG) with value date 4 July 2024. This makes KfW one of the first issuers of a crypto security in the German banking sector. The bond (Moody's: Aaa, S&P: AAA, Scope: AAA) has a volume of EUR 100 million, a maturity until 10 December 2025 and a coupon of 3.125%. KfW placed particular emphasis on investor engagement for its first crypto security. The transaction was accompanied by a bookrunner consortium consisting of DZ BANK AG, Deutsche Bank AG, LBBW and Bankhaus Metzler, which together represents the four pillars of the German banking system. During the preceding eight-week period, the bookrunner consortium also organised an intensive exchange of knowledge on the particulars of the transaction with potential European investors, which attracted among others the following investors: Berliner Volksbank, DekaBank, LBBW, Solventis AG, Sparkasse Pforzheim Calw, WI Bank. Furthermore, Union Investment, as a key anchor investor, has actively supported the transaction in a collaborative manner from the beginning.
KfW is thus the first issuer of a syndicated crypto security in accordance with the German Electronic Securities Act (eWpG). While the current transaction focused on investor engagement and the testing of new project partner roles, e.g. those of the crypto securities registrar, KfW is already planning the next steps to likewise test the DLT-based processing of payment flows (in central bank money).
15 May 2024 - The World Bank priced the first CHF digital bond by an international issuer, which will settle using Swiss Franc wholesale Central Bank Digital Currency (wCBDC) provided by the Swiss National Bank (SNB)
This 7-year CHF 200 million digital bond, the largest World Bank CHF bond issuance since 2009, uses Distributed Ledger Technology (DLT) and advances the digitalization of capital markets while also supporting the financing of World Bank’s sustainable development activities. The World Bank partnered with the SNB and SIX Digital Exchange (SDX) to further scale efforts in the use of DLT in capital markets. This partnership introduces the use of wCBDC by the SNB for initial settlement. The coupon and redemption payments will be made using tokenized CHF on the SDX. The SDX connects to conventional settlement systems such as Euroclear and Clearstream, via SIX SIS, allowing investors to hold the digital bond through their traditional custodians. The bond is listed on both SIX Digital Exchange and the traditional SIX Swiss Exchange. The securities are governed by Swiss law. The bond was placed mainly in Switzerland, with banks, bank treasuries and corporates representing the majority share of allocations at 60%, followed by asset managers, insurance companies and pension funds at 39%. The remainder was placed with central banks and official institutions.
25 April 2024 - Quincy, Massachusetts, issues first blockchain-based bond deal in U.S.
On April 25, the City of Quincy, Massachusetts, in conjunction with J.P. Morgan, issued the first bond in the United States on a platform that leverages blockchain technology. The issuance leveraged J.P. Morgan’s Digital Debt Service, an application built on Onyx Digital Assets, J.P. Morgan’s private and permissioned blockchain-based platform. J.P. Morgan served as sole underwriter on the transaction.
Proceeds for the seven-year, tax-exempt bonds will support various street and sidewalk improvements in the city, according to bond documents on MuniOS.
https://news.bloomberglaw.com/crypto/jpmorgan-sells-first-of-its-kind-muni-bond-deal-via-blockchain
https://cms7files1.revize.com/quincyma/DLT%20PR.FINAL.4.24.24%20(1).pdf
9 April 2024 - Hogan Lovells advises on issuance of native digital bond, governed by English law and issued on a public blockchain
A segregated account of Digital Bonds Ltd (the “Issuer”) issued an English law governed zero coupon digital bond, denominated in USDC, directly on the Ethereum public blockchain. The bond was fully backed by US Treasury Bills, which were purchased using the proceeds of issuance and held subject to an English law governed security deed with Ankura Trust Company, LLC as Security Agent, for the benefit of the bondholders. The transaction was arranged by PV01 Capital Markets Ltd. (“PV01”), a licenced start-up incorporated in Bermuda, with the assistance of the Hogan Lovells’ team, consisting of Head of Financial Institutions Sector Industry Group Sharon Lewis, partner Bryony Widdup and senior associate Andrea Salsi (advising PV01 as Arranger and Tokenizer), partner Kit Johnson and senior associate Axel Delaud (advising Ankura Trust Company, LLC as Security Agent). PV01 is an innovative arranger and provider of tokenisation services, focused on the convergence of blockchain technologies and conventional financial markets.
The Digital Bond was issued on chain in dematerialized form and designed to be freely transferable between investors (subject to certain pre-programmed eligibility limitations) through bearer-like features, without the need for a central securities depository.
14 March 2024 - Obligate capital markets platform, along with Capital Système Investissements, has successfully completed a bond issuance for the publicly traded French Computer Manufacturing company Metavisio (EPA: ALTHO) utilising USDC and deployed on Polygon PoS blockchain
Obligate, an on-chain capital markets platform, along with its partner Capital Système Investissements, has successfully completed a bond issuance for the publicly traded French Computer Manufacturing company Metavisio (EPA: ALTHO), utilizing USDC and deployed on the Polygon PoS blockchain. This transaction marks the first digital bond issuance for a public company ever to be conducted without the involvement of traditional banking institutions. Obligate leverages smart contract technology on the Polygon and Base blockchains to replace the role of the issuer and paying agent in the traditional bond settlement process, providing a secure, transparent, and regulatory compliant platform to manage debt instruments. The rating for this issuance was provided by Credora.
7 February 2024 - HKSAR Government announces offering of Digital Green Bonds
The Government of the Hong Kong Special Administrative Region of the People’s Republic of China (the HKSAR Government) announced the offering of around HK$6 billion worth of two-year digital green bonds (Digital Green Bonds) denominated in HK dollars (HKD), Renminbi (RMB), US dollars (USD) and euro (EUR) under the Government Green Bond Programme. The Digital Green Bonds were priced as follows: (i) HKD2 billion tranche at 3.800%, (ii) RMB1.5 billion tranche at 2.900%, (iii) USD200 million tranche at 4.749%, (iv) EUR80 million tranche at 3.647%. The clearing and settlement system of the Digital Green Bonds is the CMU, with HSBC Orion as the digital assets platform. HSBC, Bank of China (Hong Kong), Crédit Agricole CIB, Goldman Sachs (Asia) L.L.C, ICBC (Asia), UBS, Allen & Overy, Ashurst and Linklaters were involved in the preparation for the issuance.
This issuance built in standardisation elements by adopting the International Capital Market Association’s Bond Data Taxonomy (BDT), a standardised and machine-readable language that was developed to promote market efficiency and cross-system interoperability. This was the first issuance by an issuer of relevant category and the first green bond to adopt the BDT.
https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/02/20240207-6/
7 December 2023 - Hitachi issues "digitally tracked green bond" (digital green bond)
Hitachi issued a 5 year, 10 billion yen digital green bond which utilizes digital technologies such as IoT and a blockchain network developed by BOOSTRY Co., Ltd. and operated and managed by the ibet for Fin consortium. The proceeds from the issuance of the digital green bond will be used to refinance expenditures of the construction and refurbishment of Kyōsō-to of the Central Research Laboratory (energy saving building).
https://www.hitachi.com/New/cnews/month/2023/12/231207a.html
4 December 2023 - AXA IM completes its first market transaction using stablecoins, in collaboration with Societe Generale - FORGE
This initiative was carried out in two distinct phases: (i) The purchase by AXA IM on behalf of AXA France from Societe Generale - FORGE of €5 million of CoinVertible stablecoins (EURCV), a digital asset deployed on the Ethereum public blockchain and pegged to euro. (ii) An investment of €5 million from AXA IM in a green bond issued by Societe Generale in the form of “security tokens” on the Ethereum public blockchain, using the CoinVertible (EURCV) stablecoins acquired in the first phase, on behalf of AXA France. The green bond notably provides access to the reporting on carbon footprint impact of the security issuance chain infrastructure.
1 December 2023 - Swiss Cantons Basel-City and Zurich pioneer the settlement of digital bonds transactions
The digital bond issuances by the Cantons of Basel-City and Zurich were successfully settled using real CHF wholesale central bank digital currency (wCBDC) issued by the Swiss National Bank (SNB) on SIX Digital Exchange (SDX). It is the first time the SNB has issued real wCBDC in Swiss francs on a financial market infrastructure based on distributed ledger technology (DLT). This achievement is part of Project Helvetia Phase III, announced by the SNB on 2 November 2023, ushering in pilot wCBDC transactions for financial institutions from 1 December this year until mid-2024. As part of the project, Basler Kantonalbank and Zürcher Kantonalbank, acted as issuer agents of the cantons of Basel-City and Zurich.
The digital bonds of Basel-City (ISIN: CH1265890678; DTI: RD9R6Z6FM) and Zurich (ISIN: CH1306117073; DTI: 7JMK1KK1R) were successfully issued on the production platform of SDX and distributed to the banks involved. These bonds can be held in both Central Securities Depositories of SDX and of SIX (SIX SIS). In addition, as dual-listed bonds, they will be listed and tradeable at SDX (exchange) and SIX Swiss Exchange.
https://www.sdx.com/news/franc-wcbdc-transaction/
20 November 2023 - Canton of Zurich issues first digital bond
The Canton of Zurich issued its first bond that can be settled with digital central bank money on the regulated platform of the SIX Digital Exchange (SDX). The issuance took place as part of the Swiss National Bank's pilot operation of digital central bank money for financial institutions. The digital bond for 100 million francs with a term of 11 years and a coupon of 1.45 percent is a partial refinancing of an expiring bond. The joint lead management was carried out by Zürcher Kantonalbank, UBS and Raiffeisen Switzerland. With the placement, the Canton of Zurich is supporting the development of innovative financial market infrastructures in Switzerland.
15 November 2023 - The canton of Basel-Stadt issues one of the first digital Swiss franc bonds with the support of the Basler Kantonalbank (BKB)
As a participant in the “Helvetia III” project led by the Swiss National Bank (SNB), Basel-Stadt issued a digital bond facilitated by Basler Kantonalbank (BKB) on SDX, valuing 105 million francs. Collaborating with six commercial banks and utilizing SDX's DLT infrastructure, for the first time the SNB is issuing real wholesale central bank digital currency (wCBDC) in Swiss francs on the SDX financial market infrastructure.
The digital bond is purchasable with digital francs from the SNB. The bond uses the advances in digitalization and DLT but remains in the regulated financial system. This combination enables both investors and issuers to exploit the potential of digitalization without compromising on security and trust.
https://www.bs.ch/nm/2023-basel-stadt-lanciert-erste-digitale-anleihe-fd.html
24 October 2023 - Euroclear launches DLT solution for the issuance of digital securities
12 September 2023 - ABN AMRO registers a digital green bond on blockchain
ABN AMRO is the first Dutch bank to register a digital green bond on the public blockchain. With this bond, Vesteda raised 5 million EUR from DekaBank. The proceeds of the transaction will be used to (re-)finance Green Assets, in line with Vesteda's Green Finance Framework. For this issuance, ABN AMRO engaged the services of Tokeny and Fireblocks for the digital wallet. Legal services were provided by Allen & Overy and Clifford Chance.
https://www.abnamro.com/en/news/abn-amro-registers-first-digital-green-bond-on-the-public-blockchain
20 June 2023 - EIB issues its first digital green bond on so|bond - a blockchain-based platform for digital bonds, launched by SEB and Credit Agricole CIB.
The European Investment Bank (EIB) has now, as the first actor, issued a bond on so|bond. The premier bond is a digital Climate Awareness Bond of 1 billion Swedish kronor. The EIB will in turn use the proceeds for lending to climate-related projects. The platform adopts the so|bond model and is operated by Crédit Agricole CIB, CACEIS and SEB, with Crédit Agricole CIB acting as central account keeper. CACEIS and SEB take custody of the issued digital bond on behalf of their investing clients. In addition, CACEIS acts as the paying agent for the issuance.
https://www.eib.org/en/investor-relations/press/all/fi-2023-09-eib-sek-digital-bond-due-2025
https://sebgroup.com/press/news/2023/eib-premieres-bond-on-blockchain-based-platform
9 June 2023 - BOCI issues first tokenized notes, originated by UBS and placed to clients in Hong Kong
https://www.ubs.com/global/en/media/display-page-ndp/en-20230609-tokenized-notes.html
6 June 2023 - TASE and Israeli Ministry of Finance issue digital government bond in proof of concept
https://www.tase.co.il/en/content/news-lobby/20230606_pr
23 May 2023 - DekaBank announces Dortmund, Ludwigsburg, and Schwarzwald-Baar issue savings bank bonds using SWIAT blockchain platform
German savings banks are embracing digital savings bank letters offered by Deka. By transitioning from paper-based notifications to blockchain-based digital letters, tradability is greatly improved. The digital letters offer higher security standards, faster processing times, and reduced compliance risk. Deka acted as the registrar and paying agent, facilitating the transactions on the blockchain platform provided by SWIAT GmbH.
3 April 2023 - Crédit Agricole CIB and SEB launch so|bond digital bond platform
SEB and Crédit Agricole CIB are jointly launching so|bond, a “sustainable and open”* platform for digital bonds built on blockchain technology. Through the platform, issuers in capital markets will be able to issue digital bonds onto a blockchain network, aiming at improving efficiency, and enabling real-time data synchronisation across participants. The blockchain network is using a validation protocol, Proof of Climate awaReness, that encourages its participants to minimise their environmental footprint.
Blockchain technology has the potential to modernise and digitalise the banking and financial services sectors through decentralised and efficient infrastructure. The so|bond platform will enable issuers to raise capital and manage securities through smart contracts, programs that automatically execute, control or document events and actions according to the terms of the contract. The platform’s open, transparent and secure model also fosters trust between market participants and allows further innovations such as using a future central bank digital currency.
One of the main barriers to the widespread adoption of blockchain technology is that it is often considered as a high energy consuming solution. Although “Proof of Stake” protocols use significantly less energy than those that use “Proof of Work”, there is scope for further improvement. The so|bond platform is built on a new type of blockchain validation logic, the Proof of Climate awaReness protocol. It enables an energy consumption comparable to non-blockchain systems and incentivises participating nodes to continually improve the environmental footprint of their infrastructures. More specifically, each node will be remunerated for its efforts according to a formula linked to its climate impact evaluated with the Life Cycle Assessment ISO standard: the lower the environmental footprint, the larger the reward will be.
* The platform is sustainable by its invitation to reduce resources consumption and open to interested parties who want to review, contribute to, and participate in the semi-permissioned model.
16 February 2023 – HKSAR Government's Inaugural Tokenised Green Bond Offering
https://www.info.gov.hk/gia/general/202302/16/P2023021600466.htm
14 February 2023 - Siemens issues first digital bond on blockchain
Siemens is one of the first companies in Germany to issue a digital bond, in accordance with Germany’s Electronic Securities Act (Gesetz über elektronische Wertpapiere, eWpG). Worth 60 million, it has a maturity of one year and is underpinned by a public blockchain. Issuing the bond on a blockchain offers a number of benefits compared to previous processes. For instance, it makes paper-based global certificates and central clearing unnecessary. What’s more, the bond can be sold directly to investors without needing a bank to function as an intermediary.
https://press.siemens.com/global/en/pressrelease/siemens-issues-first-digital-bond-blockchain
31 January 2023 - EIB issues its first ever digital bond in pound sterling
The European Investment Bank (EIB) priced its first ever £50 million digital bond using a combination of private and public blockchains operated and accessed via HSBC Orion – the bank’s tokenisation platform. It follows the recently adopted Luxembourg legal framework tailored to allow for the issuance, transfer and custody of dematerialised securities on distributed ledger technology (DLT) infrastructure.
The pioneering vision of digital bonds intends to bring benefits to market participants by reducing costs, improving efficiency and allowing for real-time data synchronisation across participants. The architecture — distributed between BNP Paribas, HSBC and RBC Capital Markets — sees HSBC acting as central account keeper recording transactions in the digital bonds on the secure HSBC Orion platform. EIB was advised in this transaction by Clifford Chance while the joint lead managers were advised by Allen & Overy.
https://www.eib.org/en/press/all/2023-030-eib-issues-its-first-ever-digital-bond-in-british-pounds
13 January 2023 - City of Lugano issues its first native digital bond on SDX with ZKB
10 January 2022 - ABN AMRO announces registration of a digital bond on the public blockchain
ABN AMRO announced the registration of a digital bond for a Midcorp client on the public blockchain. Issued to a select group of investors, the bond raised EUR 450,000 on behalf of aircraft part-out company APOC, one of the bank’s commercial clients. The entire process of preparing, placing and documenting the bond was digital. Ownership was recorded on the blockchain in the form of tokens that the investors acquired after they had paid for the bond. To ensure custody and security of the investors’ unique keys, ABN AMRO uses a wallet for accessing the digital bond. ABN AMRO had gained previous experience with digital bonds when it purchased a digital bond from the European Investment Bank (EIB) for reselling. The bank can now draw on that knowledge for client propositions, with APOC being the first.
Work is already underway at ABN AMRO for further digital bonds in Germany and in the Netherlands. These bonds will be issued for institutional clients. For this issuance, ABN AMRO engaged the services of Bitbond and Fireblocks for the digital wallet.
8 December 2022 - KfW issues digital bond via Clearstream’s D7 platform
KfW is the first issuer to have launched a digital fixed-income bond in the form of a central register security based on the German Electronic Securities Act (eWpG). Together with Clearstream, the post-trade service provider of Deutsche Börse Group, KfW has thus taken a forward-looking step towards the digitalisation of securities issuance in the largest capital market segment – fixed income. The issue was carried out by Clearstream on Deutsche Börse’s D7 digital post-trade platform. The transaction involves a bond with a volume of EUR 20 million, a term of two years and a coupon of 2.381%. Deutsche Bank acted as lead manager for this transaction, and Hengeler Mueller as legal advisor.
In order to make even more effective use of the benefits of digitalisation, KfW is examining how further elements of the issuance process can be digitised. When using digital technologies, one of investors’ main concerns should always be taken into account: the liquidity of bonds. The digital issuance of financial products via the D7 platform shortens the extensive and multi-day issuance process to just a few minutes. This saves time, manual effort and therefore processing costs. As a next step, Clearstream plans to enhance D7 with decentral capabilities and to offer it in further jurisdictions, e. g. Luxembourg, in line with the respective regulations and market interest. Like this, the central securities depository is creating a fully digital alternative to conventional securities issuance.
https://www.kfw.de/About-KfW/Newsroom/Latest-News/Pressemitteilungen-Details_739328.html
https://www.clearstream.com/clearstream-en/newsroom/221208-3362276
29 November 2022 - EIB issues euro-denominated digital bond on a private blockchain with hedging activity leveraging industry developed Common Domain Model for interest rate swaps
The European Investment Bank (EIB) — in collaboration with Goldman Sachs Bank Europe, Santander and Société Générale — launched Project Venus, their second euro-denominated digitally native bond issue and first using private blockchain technology. The €100 million, two-year bond was issued, recorded and settled using private blockchain-based technology, and represents the inaugural issuance on Goldman Sachs’ tokenisation platform – GS DAPTM. Banque de France and the Banque centrale du Luxembourg took part in the project to provide a digital representation of euro central bank money in the form of tokens. Société Générale Security Securities Services (SGSS Luxembourg) and Goldman Sachs Bank Europe SE acted respectively as on-chain custodian and account keeper.
Project Venus consists of the issuance by the EIB of a series of bonds on a blockchain, where investors purchased and paid for the security tokens using traditional currency. The joint lead managers — Goldman Sachs Bank Europe SE, Santander and Société Générale — then settled the underwriting against the issuer using a representation of central bank money, the central bank digital currency. The transaction paves the way for future on chain derivative solutions, by using the first interest rate swap hedge represented through the industry developed common domain model (CDM). The new digital bond is the first syndicated deal settled T+0 and the first cross-chain Delivery vs Payment (DVP) settlement using an experimental CBDC token. The issuance is also the very first digital bond executed under the Luxembourg law. Blockchain is a digital and distributed ledger of transactions using advanced cryptographic techniques and the contribution of a network of participants. The participants jointly validate the transactions in blocks in an ordered and fixed sequence (hence the name blockchain). This combination of features primarily aims to provide enhanced security and operational efficiency without resorting to a single registry to keep track of bondholders.
4 November 2022 - HSBC announces Orion tokenisation platform for digital bonds issuance
https://www.gbm.hsbc.com/-/media/gbm/campaign/media-releases/announcing-hsbc-orion.pdf
3 November 2022 - UBS AG launches digital bond publicly traded and settled on both blockchain-based and traditional exchanges
UBS AG priced its inaugural senior unsecured digital bond, a 375 million Swiss franc-denominated three-year bond with 2.33% coupon (ISIN: CH1228837865). The digital bond has the same instrument structure, legal status and rating as a traditional UBS AG senior unsecured note but is the first ever digital bond by a banking institution globally that will be listed, traded and settled on a regulated digital exchange. Through this bond, UBS enables investors, regardless of whether they have the blockchain infrastructure, to invest in a digital bond. This removes a hurdle on the way to adopt new disruptive technology that can make issuing bonds faster, more efficient and simpler.
The digital bond settles via SIX Digital Exchange (SDX) distributed ledger-based central securities depository (CSD) network through atomic settlement technology. Settlement via SDX CSD is instant and automatic and does not require a central clearing counterparty. Investors will have the ability to automatically settle and clear the UBS digital bond on either SDX CSD directly or on SIX SIS via the operational link which was formally announced on 3rd October 2022. The digital bond will be dual listed at SDX Trading and SIX Swiss Exchange and will be eligible for the Swiss Bond Index (SBI) alongside all other UBS AG senior unsecured notes which are listed on SIX.
19 October 2022 - Israel’s Ministry of Finance and TASE prepare for the issuance of government bonds on a blockchain platform
23 August 2022 - IDB Group and Davivienda Bank announced the issuance of Colombia's first blockchain bond
The IDB Group — composed of the Inter-American Development Bank, IDB Invest and IDB Lab — and Colombia’s Davivienda Bank issued the first blockchain bonds in Latin America and the Caribbean, as a pilot project within Colombia’s regulatory innovation sandbox. This pilot is the first of its kind in the region. The processes of authorisation, initial registration, and subsequent cancellation of the bond's registration in the National Registry of Securities and Issuers (RNVE), as well as the issue, trading, payment registration and compliance of the bond were done entirely on blockchain. This approach allowed the banks to test ways to streamline the process and bring down its costs over a complete trading cycle on the Colombian capital market.
26 July 2022 - BME, BBVA and IDB Issue Spain’s First Blockchain-Based Regulated Bonds
The Iberclear subsidiary of Bolsas Mercados Españoles (BME), along with Banco Bilbao Vizcaya Argentaria (BBVA) and the Inter-American Development Bank (IDB), issued the first bonds in Spain to be listed on a regulated market and also registered using blockchain technology developed by the technological partner for the transaction, ioBuilders. The platform opens the door for similar bond issues in Spain and Latin America and the Caribbean. Since February 2022, BME, BBVA, IDB and ioBuilders have been building this pioneering blockchain platform that can be used to register bonds issued on a regulated market, trade them on the secondary market and manage their life cycle. The operation used smart contracts to distribute, buy and sell, and settle bonds, as well as for corporate events, with electronic money tokenized by BBVA for managing cash over the life of the bonds.
The project was led and managed by BME and its IT partner ioBuilders, in partnership with LACChain, an IDB initiative that aims to accelerate use of blockchain technology to promote development. The alliance will allow BBVA to export the technology to Latin America, where access to alternative project finance is more limited. Garrigues was bond counsel for the transaction. In addition to tokenizing digital money, BBVA played the critical roles of digital custodian, digital structurer and active bookrunner in the transaction. Citi was the agent, while Iberdrola and Renta 4 invested in the bonds.
https://www.bolsasymercados.es/ing/Media/Press-Release/20220726/nota_20220726_4/BME__BBVA_and_IDB_issue_the_first_regulated_bond_in_Spain_registered_with_Blockchain
https://www.iadb.org/en/news/bme-bbva-and-idb-issue-spains-first-blockchain-based-regulated-bonds
https://www.bbva.com/en/bbva-bme-and-idb-issue-the-first-regulated-bond-in-spain-registered-with-blockchain/
2 June 2022 - PDS Group launches DLT-based digital bond, issued by UnionBank
The Philippine Dealing System Holdings Corp. (‘PDS Group’) today announced the launch of a fully digitally native bond, issued on a distributed ledger technology (‘DLT’) network powered by Hashstacs Pte Ltd (‘STACS’), a Singapore-headquartered FinTech firm. The digital bond was issued by the Union Bank of the Philippines (‘UnionBank’) for PHP 11.00 billion or approximately USD 210 million and priced at 3.25% p.a. for a tenor of 1.5 years. PDS Group subsidiary Phil. Depository & Trust Corp. (‘PDTC’), the national Central Securities Depository for debt and equities, and STACS embarked on the project, a proof of concept to explore, use, and determine efficiencies of DLT for PDTC’s fixed income registry and depository operations, with the aim of deploying a viable DLT-powered PDTC Digital Registry & PDTC Digital Depository system to support issuances and servicing (transfers and corporate actions) of a Philippine Digital bond and culminating in the live issuance of a digitally native bond.
1 June 2022 - OCBC Bank digitises Euro Commercial Paper from issuance to settlement on Marketnode platform
SGX CDP has made available to market participants a blockchain-enabled bond issuance platform by Marketnode, an SGX Group-Temasek digital asset venture, that allows debt issuers to shorten the settlement time for new-issue bond offerings to two days, in line with the typical settlement period for the secondary bond market. Marketnode’s issuance platform, which connects debt issuers into SGX CDP, facilitates the digitalisation of manual processes in bond issuance and allows the full elimination of paper trail with a 60% reduction in settlement time (from T+5 to T+2) for issuers using the platform. OCBC Bank’s US$100 million Euro Commercial Paper issuance is the first transaction on Marketnode’s “direct-to-depository” platform.
20 April 2022 - Singtel partners UOB and ADDX on digital sustainability-linked bond
15 February 2022 - FQX and SIX Digital Exchange to collaborate on Blockchain-based short-term debt instruments
Switzerland’s SIX Digital Exchange (SDX), the world’s first fully FMI licensed digital asset exchange, and FQX, a SIX Fintech Ventures portfolio company, have agreed to collaborate to enable the use of FQX’s blockchain-based short-term debt instruments, eNotes™, on SDX. Today’s short-term financing markets are vast with an estimated $65tn+ in annual transaction volumes globally. Due to legacy systems and a lack of global standardization, these markets are widely fragmented and inefficient, causing liquidity silos. FQX’s infrastructure for a standardized, digital debt instrument, the eNoteTM, in combination with SDX’s digital financial market infrastructure, work hand in hand to break these silos. Thus, locked up liquidity is released while trust and transparency are enhanced.
An eNote™ is an unconditional promise to pay a specific sum to another party at a specific future date and can be modularly structured to fit any financing purpose. The eNote™ is based on blockchain technology and can be easily transferred to any third party (i.e. an investor). When compared to other financing tools, eNotes™ excel through their modularity and global transferability, based on a standardized legal framework. Single eNotes are stored as NFTs on a blockchain. By issuing multiple eNotes, an issuer can obtain financing in a way comparable to commercial papers.
14 February 2022 - Japan Exchange Group announces research to commence on digitally tracked green bonds using security tokens
As part of its efforts to achieve carbon neutrality across group companies, as well as to improve the overall operational efficiency of bond issuance through digitalization, Japan Exchange Group, Inc. (JPX) has started looking into raising funds through issuance of security tokens in the form of a "Digitally Tracked Green Bond" using technology from BOOSTRY. JPX is now considering raising part of the funds needed for energy generation facility investments by issuing a Digitally Tracked Green Bond, which is the subject of the current research.
A "Digitally Tracked Green Bond" is a bond that utilizes digital technologies such as blockchain to improve transparency of data and efficiency of data collection, thereby tackling issues that have been raised by both issuers and investors of green bonds around the transparency of data and complexity of the data collection process needed for green investment. This is the first initiative of its kind in Japan. Specifically, in order to improve transparency around the use of funds raised by the planned bond issue, we will create a mechanism that automatically measures the amount of power generated by the solar and biomass power generation facilities and converts it into an amount of CO2 reduced. By utilizing digital technologies in this way, JPX will aim for greater transparency than just annual reporting by creating a mechanism that enables investors to monitor progression from outside at any time. The primary objective of this initiative is to help JPX achieve carbon neutrality as an issuer, but in the future, we aim to contribute to the carbon neutrality of society as a whole by sharing the lessons learned and the issues discovered in the process.
https://www.jpx.co.jp/english/corporate/news/news-releases/0010/20220214-01.html
9 February 2022 - Fnality, Nivaura and Adhara collaborate with NatWest and Santander to execute pilot debt transaction
Three UK FinTechs, in collaboration with two major European banks, today announced the successful completion of a pilot proof of concept (POC) involving the issuance of a tokenised security on a public blockchain, with the payment leg conducted through a new, DLT-enabled payments system. Fnality – the FinTech firm creating a network of distributed payment systems using blockchain technology – partnered with Nivaura – the FinTech firm developing low-code/no-code transaction management workflow automation technology for primary markets – to structure, execute and settle a tokenised primary securities issuance, with the payment leg settled in a test central bank money-backed digital asset. Fnality also partnered with Adhara – a leading software company that provides real time, multi-currency, liquidity management and international payment solutions – to facilitate the payment leg via the creation of an Ecosystem TestNet.
The TestNet is an early working and live example of how Fnality’s DLT-based payment systems will help facilitate several benefits and use cases, including intraday liquidity savings, end-to-end repurchase agreements, and interbank intraday FX swaps. It has been adopted alongside Nivaura’s product by Santander and NatWest for the purposes of this POC to demonstrate, in what has traditionally been a time-intensive and manual process, a near-instant solution that structures, executes and settles trades on a T=0 basis, enabling participants to easily accelerate time to market for debt issuances. NatWest and Santander acted as the two counterparties to the transaction, demonstrating the ability of DLT to streamline both capital markets and payments activity in the future.
https://www.nivaura.com/media/uk-fnality-nivaura-adhara-natwest-and-santander-first-crosschain-pilot-debt/
https://www.fnality.org/news-views/fnality-celebrates-completion-of-a-landmark-dvp-proof-of-concept
https://adhara.io/uk-fintechs-fnality-nivaura-and-adhara-collaborate-with-natwest-and-santander/
11 January 2022 - FQX, Credit Suisse (Schweiz) AG, SFS & Mikron announce the completion of blockchain-based eNotesTM pilot
FQX, Credit Suisse (Schweiz) AG, SFS & Mikron announced the successful completion of a Pilot using eNotesTM as a financing instrument. In a pilot transaction, leveraging the technology built by the Zurich-based FinTech FQX, Credit Suisse provided financing to SFS & Mikron using the electronic Promissory Note, or eNoteTM. The eNoteTM is a blockchain-based short-term debt instrument with which corporates like SFS & Mikron can radically facilitate their corporate treasury operations while increasing financial steering flexibility.
https://blog.fqxnotes.com/https-www-bloomberg-com-press-releases-2022-01-11-fqx-credit-suisse-schweiz-ag-sfs-mikron-announce-the-successful-completion-of-a-pilot-using-enotes/
16 December 2021 - Banque de France experiment on issuance of a digital bond and subscription with settlement in CBDC
The Banque de France successfully completed the last experiment of its programme for interbank settlements in Central Bank Digital Currency (CBDC), launched in March 2020. The final experiment was jointly conducted with a group of private actors led by HSBC. The experiment consisted in the issuance of a digital bond on a Blockchain and its subscription with a settlement in CBDC. The experiment successfully tested an end-to-end transactional lifecycle of digital assets, through issuance, subscription by several actors, and coupon payment involving a conversion into another currency. All those transactions occurred across different Blockchain environments operated by HSBC for the custody of the assets, and by the Banque de France for the securities settlement and the CBDC.
The communication across the different environments relies on several interoperability components developed specifically, and which represent the benefit of this experiment. They allowed the transfer of the data pertaining to the digital bond across chains, to trigger automatically and atomically the settlement and the accounting of the securities, cash and foreign exchange flows in the various environments, whilst guaranteeing that the Banque de France could control the usage of the central bank money. All those operations were jointly conducted with HSBC and its technology partner IBM, members of the group of actors specifically established for this experiment. The Banque de France will proceed with its CBDC experimentation programme, which second tranche will be mainly dedicated to cross-border transactions.
https://www.banque-france.fr/en/communique-de-presse/banque-de-france-has-successfully-completed-first-tranche-its-experimentation-programme-central-bank
14 December 2021 - DekaBank issues bearer bonds on the blockchain
DekaBank issued its first crypto securities, marking the start of its business activities to maintain a crypto securities register. The bearer bonds were issued via Deka's blockchain-based securities platform SWIAT. The buyers of the bonds are Bankhaus Metzler and Hauck & Aufhäuser.
A crypto security is a form of electronic security. Unlike traditional securities, a paper certificate is no longer required for issuance. Since the German electronic securities act (eWpG) came into force in June 2021, an entry in an electronic register has been sufficient. However, rights and obligations are identical for traditional and electronic securities. Crypto securities are entered in a decentralized manner in a blockchain-based crypto securities register. The central securities register is thus no longer required. The individual parties therefore enter into a direct exchange, mostly based on distributed ledger technology (DLT) without the involvement of a central securities depository.
https://www.deka.de/deka-group/media-research-en/media-releases/archive/archive2021/december/dekabank-issues-first-crypto-securities-on-the-blockchain
8 December 2021 - BIS, Banque de France and SNB wholesale CBDC experiment, including issuance, transfer, and redemption of tokenised euro-denominated French commercial paper
Central bank digital currencies (CBDCs) can be used effectively for international settlements between financial institutions, as shown in the newest wholesale CBDC experiment concluded by the Bank for International Settlements (BIS), the Bank of France (BdF) and the Swiss National Bank (SNB). The recently completed Project Jura explored settling foreign exchange (FX) transactions in euro and Swiss franc wholesale CBDCs as well as issuing, transferring and redeeming a tokenised euro-denominated French commercial paper between French and Swiss financial institutions.
Project Jura was conducted in collaboration with a group of private sector firms comprising Accenture, Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS. It continues the experimentation conducted by the SNB and the BIS Innovation Hub under Project Helvetia and is part of a series of wholesale CBDC experiments initiated by the BdF in 2020.
https://www.bis.org/press/p211208.htm
https://www.banque-france.fr/en/communique-de-presse/banque-de-france-bank-international-settlements-and-swiss-national-bank-conclude-successful-cross
https://www.snb.ch/en/mmr/reference/pre_20211208/source/pre_20211208.en.pdf
6 December 2021 - Match On firstwire: Vasakronan Issues First DLT-Based Green Note
The Stockholm based real-estate company Vasakronan AB used the firstwire marketplace to self-arrange the first fully Digital Registered Green Note (“digitale Namensschuldverschreibung”) based on DLT in the European market, thereby pioneering a new format. The EUR 50 million issuance was placed directly with DekaBank on the firstwire marketplace in a straight through processed transaction. After the security token issuance by the DAX-listed German real estate company Vonovia SE earlier this year on firstwire, this Vasakronan transaction is another milestone for DLT debt issuance.
Investors and issuers use firstwire to transact with each other without the need for intermediaries. firstwire connected to DekaBank’s SWIAT (Secure Worldwide Interbank Asset Transfer) network to facilitate a broader range of digital settlement infrastructure to its clients. firstwire’s technology and smart matching algorithms allow issuers and investors to mutually transact within seconds.
Press Release: Firstwire enables Vasakronan and DekaBank to trade first DLT-based green note
18 November 2021 - SIX placed the first senior unsecured digital CHF bond with a total volume of CHF 150 million and maturity in 2026
SIX launches its SIX Digital Exchange by successfully issuing the world’s first digital bond in a fully regulated environment. The bond comprises two exchangeable parts. The digital part (Part A) of the bond will be listed and traded on SDX Trading Ltd and centrally held by SIX Digital Exchange Ltd. The traditional part (Part B) of the bond will be listed and traded on SIX Swiss Exchange Ltd and centrally held by SIX SIS Ltd. This innovative approach ensures the link between the digital and traditional worlds.
The digital part (Part A) of the bond accounts for CHF 100 million of the total issue volume. CHF 50 million was allocated to the traditional part of the bond (Part B). The coupon amounts to 0.125% per year, corresponding to a yield to maturity of 0.125%. Unless the bonds are repaid prematurely or acquired and canceled, they will be repaid at their nominal value on the due date. The company will use the net proceeds of the bond placed for general financing purposes of SIX.
https://www.six-group.com/en/newsroom/media-releases/2021/20211118-six-sdx-digital-bond.html
28 April 2021 - EIB issues its digital bond on a public blockchain
On 27 April 2021, the EIB launched a digital bond issuance on a blockchain platform, deploying this distributed ledger technology for the registration and settlement of digital bonds, in collaboration with Goldman Sachs, Santander and Societe Generale. In a partnership with Banque de France, the payment of the issue monies from the underwriters to the EIB has been represented on the blockchain in the form of CBDC.
The EIB believes that the digitalisation of capital markets may bring benefits to market participants in the coming years, including a reduction of intermediaries and fixed costs, better market transparency through an increased capacity to see trading flows and identity asset owners, as well as a much faster settlement speed. Blockchain is a digital and distributed ledger of transactions using advanced cryptographic technics and the contribution of a network of participants to jointly validate the said transactions by blocks in an ordered and immutable sequence (hence the name ‘Blockchain’). This combination of features primarily aims at providing enhanced security and operational efficiency.
This transaction consists in the issuance by the EIB of a series of bond tokens on a blockchain, where investors purchase and pay for the security tokens using traditional fiat. The Joint Lead Managers will then settle the underwriting against the issuer using a representation of central money, the Central Bank Digital Currency (CBDC). The principal is expected to be repaid in commercial fiat at maturity. The transaction will use Ethereum, a public blockchain protocol.
https://www.eib.org/en/press/all/2021-141-european-investment-bank-eib-issues-its-first-ever-digital-bond-on-a-public-blockchain#
https://www.banque-france.fr/en/communique-de-presse/experiment-use-central-bank-digital-currency-cbdc
15 April 2021 - Societe Generale issues structured product on public blockchain
On 15 April 2021, Societe Generale issued the first structured product (Autocall, Euro Medium Term Notes (EMTN), EUR 5m) as a Security Token directly registered on the Tezos public blockchain. The securities were fully subscribed by Societe Generale Assurances. This operation follows in the footsteps of a first covered bond Security Token issuance worth EUR 100m on the Ethereum blockchain, settled in euros in April 2019, and of a second covered bond Security Token issuance worth EUR 40m this time settled in Central Bank Digital Currency (CBDC) issued by Banque de France, in May 2020. This transaction completes a new step in the development of Societe Generale – Forge, a regulated subsidiary of Societe Generale Group, aiming at offering by 2022 crypto assets structuring, issuing, exchange and custody services to the Group’s professional clients.
This new experimentation, performed in accordance with best market practices, demonstrates the legal, regulatory and operational feasibility of issuing more complex financial instruments (structured products) on public blockchain. It leverages on this disruptive technology which enables increased efficiency and fluidity of financial transactions: unprecedented capacity of product structuration, shortened time-to-market, automated corporate actions, increased transparency and speed in transactions and settlements, as well as reduced cost and number of intermediaries. Societe Generale – Forge innovative operating model enables Security Tokens to be directly integrated to conventional banking systems interfaced with SWIFT format.
https://www.societegenerale.com/en/news/press-release/first-structured-product-public-blockchain
13 January 2021 - Vonovia issues First Fully Digital Note via Online Marketplace firstwire
Vonovia is further expanding the digitalization of its finance division. The residential real estate company issued a fully digital registered bond of € 20 million for the first time. It has a term of three years. Security tokens following the strictest security standards were used for the transfer of ownership of the bond. The transfer of ownership rights of real assets take place on the established Stellar blockchain, which is used for transactions around the globe.
The transaction is a novelty on the capital market – Vonovia created the tokens independently using the online marketplace firstwire. Vonovia had already used the platform, which brings issuers and investors together directly and in real time, to place a promissory note of € 50 million in September 2019.
https://presse.vonovia.de/en/aktuelles/210113-vonovia-emittiert-erstmals-vollstaendig-digitale-schuldverschreibung
Independent private bank M.M. Warburg & CO has become the exclusive investor in an innovative digital note transaction using blockchain.
https://www.mmwarburg.de/export/sites/warburg-bankhaus/.galleries/downloads/pressemitteilungen/2021/210113_PI_MMW_Digitale_Schuldverschreibung_engl.pdf
7 December 2020 - UnionBank, Standard Chartered pioneer blockchain-enabled bond issuance in the Philippines
Union Bank of the Philippines (UnionBank), in partnership with Standard Chartered Bank (SCB), successfully completed a proof of concept for the issuance of a retail bond on a digital platform leveraging blockchain technology for bond tokenization.
The 3 and 5.25-year dual tranche issuance totalling PHP 9 billion by UnionBank was successfully mirrored on the platform co-created by UnionBank and SC Ventures, the innovation and ventures arm of Standard Chartered. Orders received were tokenized, and to stay within existing retail bond guidelines, tokens issued mirrored the traditional transaction but were not allocated directly to investors. SC Ventures built the bond tokenisation platform making the process simpler, faster and widely accessible.
The success of this proof of concept will open up a host of possibilities around solving for liquidity and transparency in the retail bond markets. The Online Bond Reservation portal of UnionBank where the bonds were made available is also the Philippines’ first digitally enabled platform allowing clients to view and place order reservations for corporate bond offerings conveniently anytime, anywhere -making a highly cumbersome and manual process simpler and more widely accessible. Through the portal, UnionBank clients experience a fully digital end-to-end service, from account verification, client suitability assessment and the filling up of the application to purchase form, up to allocation to the investor. The portal also makes the purchase of bonds completely paperless and more efficient as it cuts the processing time for customers from a couple of days to mere minutes.
https://av.sc.com/corp-en/nr/ph/content/docs/SCB_PR-UnionBank-Standard-Chartered-pioneer-blockchain-enabled-bond-issuance-in-the-Philippines-.pdf
11/12 November 2020 - Statements by Fusang Exchange and China Construction Bank Corporation Labuan Branch
Per the request of the issuer, Longbond Ltd., the listing of Longbond SR Notes USD Feb 2021 will be delayed until further notice.
https://www.fusang.co/lb-131120
China Construction Bank Corporation Labuan Branch (“the Branch”) would like to state that the press coverage on the first block chain based bond (“the Bond”) is as follows:
- the Branch is NOT the issuer of the Bond.
- the role of the Branch is as the Lead Arranger, Listing Advisor of the Bond, and the Facility Agent to facilitate clearing and settlement of the Bond in USDs.
- the Branch does NOT accept cryptocurrencies including Bitcoin for settlement in any of its banking transactions.
http://my.ccb.com/malaysia/en/ggxx/202011121605186966.html
11 November 2020 - CCB and FUSANG Exchange take lead to bring to market the first blockchain-based digital bond accessible to global investors
China Construction Bank Corporation Labuan Branch (“CCB Labuan”), a tier-1 branch of Beijing-headquartered China Construction Bank Corporation (“CCB”), will be the lead arranger for the first publicly listed debt security on a blockchain, to be tradeable on FUSANG Exchange. The bond, Longbond SR Notes (“LBFEB21”), will be issued by Longbond Ltd., a securitisation Special Purpose Vehicle (“SPV”) set up with the sole purpose of issuing digital bonds and depositing the proceeds with CCB Labuan. CCB Labuan will act as the lead arranger and listing sponsor for the deal.
This “Longbond” represents the first digital security to be listed on a public stock exchange that is directly accessible by retail investors. […] The bond will give investors access to bank-secured deposits at an annualised rate of LIBOR +50bps (~0.70%), considerably higher than market interest rates for typical fixed deposits. It represents direct, unconditional, unsubordinated, and fully secured obligations that are ultimately backed by the balance sheet of the world’s second-largest bank. It will be issued at a discount and can be traded on FUSANG Exchange prior to maturity, in USD and Bitcoin (“BTC”), with a total program target size of USD 3 billion.
https://www.fusang.co/new-listing-release-longbond
11 September 2020 - Bank of Thailand launches new Government Bond Infrastructure with Blockchain Technology
The Bank of Thailand (BOT) successfully launched a new platform leveraging Blockchain Technology for Government Savings Bond issuance. It aims to enhance investors’ buying experience, improve operational efficiency and reduce overall cost. Fifty billion baht of government savings bonds have been sold out in a week.
DLT Scripless Bond Project has applied Blockchain Technology to develop a secure and efficient government bond infrastructure. It is a collaborative effort among eight institutions, which are BOT, Public Debt Management Office, Thailand Securities Depository Co., Ltd, Thai Bond Market Association and selling-agent banks, including Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank.
In the next phase, the infrastructure will expand to support all different government bonds, both retail and wholesale, to fully served demand of all stakeholders.
https://www.bot.or.th/content/dam/bot/documents/en/news-and-media/news-pdf/2020/n5963e.pdf
14 May 2020 - Societe Generale performs the first financial transaction settled with a Central Bank Digital Currency
Societe Generale SFH, the covered bond vehicle of Societe Generale, issued €40 million of covered bonds (“obligations de financement de l’habitat” or “OFH”)) as security tokens directly registered on a public blockchain. Rated Aaa by Moody's and AAA by Fitch, these OFH Tokens were fully subscribed by Societe Generale which simultaneously paid the issuer in a digital form of euros issued by Banque de France through a blockchain platform. The experimentation was performed end-to-end using blockchain infrastructures, in accordance with best market practices. It demonstrates the feasibility of financial securities being digitally settled and delivered in Central Bank Digital Currency (CBDC) for interbank settlements.
The transaction follows in the footsteps of an initial issue worth €100 million in security tokens by Societe Generale SFH on 18 April 2019, which was settled in the traditional manner in euros. It seals a new stage in the development of Societe Generale Forge platform, aimed at promoting new blockchain-based market activities.
https://www.sgforge.com/societe-generale-performs-the-first-financial-transaction-settled-with-a-central-bank-digital-currency/
12 September 2019 - Santander launches the first end-to-end blockchain bond
Banco Santander today announced that it has issued the first end-to-end blockchain bond. The bank issued the bond directly onto the blockchain and the bond will also continue to exist only on the blockchain: a first step towards a potential secondary market for mainstream security tokens in the future. Banco Santander is itself the issuer of the $20 million bond, while one of the Group’s units purchased the bond at market price. The bond carries a quarterly coupon of 1,98%. Santander Securities Services is acting as tokenization agent and custodian of the cryptographic keys. […]
Santander used the public Ethereum blockchain, one of the more advanced open source blockchain technologies. This allows Santander to achieve the milestone of tokenizing the bond securely and registering it in a permissioned manner on the blockchain. The cash used to complete the investment (on-chain delivery-versus-payment) and the quarterly coupons have also been tokenised, i.e., represented digitally on the blockchain. Thanks to this automation, the one-year maturity bond has reduced the number of intermediaries required in the process, making the transaction faster, more efficient and simpler.
https://www.santander.com/csgs/Satellite/CFWCSancomQP01/en_GB/Corporate/Press-room/2019/09/12/Santander-launches-the-first-end-to-end-blockchain-bond.html
16 August 2019 - Bond-i tap – managed by CBA, RBC and TD – increases liquidity of Blockchain Bond and broadens market participation
The World Bank (International Bank for Reconstruction and Development, IBRD rated Aaa/AAA) has raised an additional AUD 50 million for its Kangaroo bond due August 2020 - the first bond created, allocated, transferred and managed through its life-cycle using distributed ledger (blockchain) technology.
The successful tap expands market participation with the Bond-i platform combining three joint lead managers, Commonwealth Bank of Australia (CBA), RBC Capital Markets (RBC) and TD Securities (TD), and brings together new market participants, including an offshore investor, and the exisiting investor community including ongoing support and input from TCorp (NSW Treasury Corporation).
https://www.worldbank.org/en/news/press-release/2019/08/16/world-bank-issues-second-tranche-of-blockchain-bond-via-bond-i
11 July 2019 - YES BANK implements Asia’s First Commercial Paper Issuance on Blockchain
YES BANK, India’s fourth largest private sector bank, as an issuing and paying agent (IPA), facilitated the issuance of a Commercial Paper (CP) of INR 100 Crores [approx. USD 15m] using Blockchain technology for Vedanta Limited, a natural resources conglomerate. This is the first time in Asia that a CP has been digitally issued using Blockchain technology. The digital solution ensures an efficient, transparent and secure mechanism for CP issuance and redemption. This transaction was completed in partnership with MonetaGo, a leading provider of financial technology headquartered in New York, USA. MonetaGo built the solution using Corda Enterprise, technology provided by R3, a leading enterprise Blockchain software firm.
As part of the business solutioning, the stakeholders in the CP issuance and redemption benefit from: Reduction in Turnaround Time (TAT) for issuance and redemption; Immutable digital records of the entire transaction documents thereby reducing operational risk; Real-time Visibility of the CP issuance and redemption; Common Network for all participants in the CP issuance and redemption process.
https://www.yesbank.in/about-us/media/press-releases-details/3000000102654-press-release-list-item-jul-19-20_5
19 June 2019 - EIB, Euroclear, Banco Santander & EY developing blockchain solution for the issuance and settlement of ECPs
European Investment Bank (EIB), Euroclear, Banco Santander, and EY have worked together on an end-to-end blockchain solution for the issuance and settlement of European Commercial Paper (ECP).
The proposed blockchain solution will reduce time-consuming bilateral processing between multiple market participants, providing one efficient consolidated hub for the issuing of ECP with DVP settlement by Euroclear. Other key benefits of this blockchain solution would be full transparency and traceability of ECP issuance related activities; a reduction in operational costs and true time optimisation, making ECP same day issuance, a new market standard. […] Based on the initiative’s success, Euroclear intends to move on to pilot phase soon. Other ECP issuance institutions have expressed interest and will be invited to participate in the pilot phase.
https://www.euroclear.com/newsandinsights/en/press/2019/2019_mr-11-Euroclear-developing-Blockchain-solution.html
18 April 2019 - Societe Generale issued the first covered bond as a security token on a public blockchain
Societe Generale SFH, a subsidiary of Societe Generale Group, issued EUR 100m of covered bonds (“obligations de financement de l’habitat” or “OFH”) as a security token, directly registered on the Ethereum blockchain. OFH Tokens have been rated Aaa / AAA by Moody’s and Fitch and have been fully subscribed by Societe Generale. This operation is the first pilot project developed by Societe Generale and Societe Generale FORGE, one of the 60 internal startups launched via the Internal Startup Call, the Group’s intrapreneurial programme. This startup experiments disruptive business solutions using blockchain technology to develop new digital capital market activities.
This live transaction explores a more efficient process for bond issuances. Many areas of added value are predicted, among which, product scalability and reduced time to market, computer code automation structuring, thus better transparency, faster transferability and settlement. It proposes a new standard for issuances and secondary market bond trading and reduces cost and the number of intermediaries.
https://www.societegenerale.com/en/newsroom/first-covered-bond-as-a-security-token-on-a-public-blockchain
21 February 2019 - Continental, Commerzbank and Siemens Successfully Field-Tested Blockchain Technology on Money Market
For the first time, Continental, Commerzbank and Siemens have carried out a test transaction as part of a pilot project to process a money market security between the companies using blockchain technology. The transaction took place in January. It had a volume of €100,000 and a term of three days. Continental was the issuer of the money market security, which was in the form of a euro-denominated electronic commercial paper according to legal requirements stipulated in the Luxembourg law. Commerzbank provided the Corda-based blockchain platform through its research and development unit, Main Incubator, and acted as a service partner. Siemens subscribed to the money market security as an investor. Corporate law firm GSK Stockmann provided legal advice on the transaction.
[…] In this pilot project, the transaction was initiated and settled directly between the two companies. A regular securities transaction between two companies was used as a starting point. The companies not only generated the money market security, but also processed the trade (including payment processing) in a legally binding manner using blockchain. The documents and funds were exchanged in a matter of minutes rather than days using this process. Unlike with conventional transactions, Commerzbank was no longer acting as a broker between contracting parties for this particular transaction, but as a platform operator and service partner. It provided the platform and all the technical requirements for blockchain trading, the legal structure and the digital money for direct trading of the money market security (based on e-money as financial collateral, “cash on ledger”).
https://www.commerzbank.de/en/hauptnavigation/presse/pressemitteilungen/archiv1/2019/quartal_19_01/presse_archiv_detail_19_01_79242.html
19 February 2019 - BBVA issues the first blockchain-supported structured green bond for MAPFRE
BBVA Group issued the first structured green bond using blockchain technology to negotiate the terms and conditions. It is a private placement in which MAPFRE invested €35 million six year term bond linked to the evolution of the five year euro swap rate. With this bond issue, the BBVA Group demonstrates that it has the means, knowledge, and commitment to provide its clients cutting-edge products based on the latest technologies and innovative sustainable solutions.[…]
The use of this platform offers the following advantages throughout the process:
It allows all participants to have access to the transaction. Distributed ledger technology reduces issuing time and ensures that negotiations and agreements reached are traceable and immutable. These features of traceability and immutability make it easier to demonstrate compliance with relevant regulations.
The platform allows the client to choose between numerous product configuration options. This feature provides the client considerable flexibility in terms of designing the bond that best suits their needs. […]
https://www.bbva.com/en/bbva-issues-the-first-blockchain-supported-structured-green-bond-for-mapfre/
2 October 2018 - Start of blockchain application for Austrian government bond auctions
For the first time ever Oesterreichische Kontrollbank AG (OeKB) is going live with a blockchain technology based application. The new technology is used for data notarization for reports from the 2 October government bond auction onwards. This notarization service provides a trail to verify the authenticity of data, thereby ensuring the greatest possible degree of data security. Notarization is a new additional support element for the auction process. Blockchain technology is used in this particular case as an additional layer of security.
Blockchain-based data notarization involves using an encryption method for documents to derive a unique electronic fingerprint, known as the hash. This hash is unambiguously assignable to the original document, but conversely does not allow conclusions to specific data content. "This means the original document can be stored securely in OeKB’s computing centres, and the authenticity of the document can be guaranteed. The blockchain implementation enables OeKB to integrate a further level of security based on blockchain in addition to the already existing high standards of security," explains Angelika Sommer-Hemetsberger.
https://www.oekb.at/en/oekb-group/news-und-wissen/news/2018/blockchain-einsatz-bundesanleihebegebungen.html
https://www.oekb.at/en/oekb-group/presse/pressemitteilungen/2018/blockchain-einsatz-bei-bundesanleihebegebungen-gestartet.html
23/24 August 2018 - World Bank Prices First Global Blockchain Bond, Raising A$110 Million
The World Bank launched bond-i (blockchain operated new debt instrument), the world’s first bond to be created, allocated, transferred and managed through its life cycle using distributed ledger technology. The two-year bond [with a 2.20% coupon] raised A$110 million, marking the first time that investors have supported the World Bank’s development activities in a transaction that is fully managed using the blockchain technology.
The World Bank mandated Commonwealth Bank of Australia (CBA) as arranger for the bond on August 10. The announcement was followed by a two-week consultation period with the market, with key investors indicating strong support for the issuance. […] Investors in the bond include CBA, First State Super, NSW Treasury Corporation, Northern Trust, QBE, SAFA, and Treasury Corporation of Victoria.
https://www.worldbank.org/en/news/press-release/2018/08/23/world-bank-prices-first-global-blockchain-bond-raising-a110-million
https://www.commbank.com.au/guidance/newsroom/cba-helps-world-bank-raise-a-110-million-with-launch-of--bond-i--201808.html?ei=card-view
15 August 2018 - BMO Capital Markets Launches First-of-its-Kind Blockchain Pilot to Mirror Canadian Dollar Fixed Income Issuance Transaction with Ontario Teachers'
The transaction included Bank of Montreal as the issuer and Ontario Teachers' as the buyer of a CDN$250MM 1-year floating rate Deposit Note, making it the first Canadian dollar fixed income issuance demonstrating the viability of blockchain platforms.
The pilot transaction – booked as a traditional Canadian Depository for Securities (CDS) issuance and successfully paralleled through the blockchain – was conducted to demonstrate how smart contracts and blockchain could be used for fixed income markets.
https://newsroom.bmo.com/2018-08-15-BMO-Capital-Markets-Launches-First-of-its-Kind-Blockchain-Pilot-to-Mirror-Canadian-Dollar-Fixed-Income-Issuance-Transaction-with-Ontario-Teachers
9/10 August 2018 - World Bank Mandates Commonwealth Bank of Australia for World’s First Blockchain Bond
The $AUD Kangaroo bond, termed ‘bond-i’ - Blockchain Offered New Debt Instrument – has been developed with the support and input of the investor community including Northern Trust, QBE and Treasury Corporation of Victoria. Once launched the bond will be issued and distributed on a blockchain platform operated by the World Bank and CBA in Washington and Sydney, respectively.
Indicative investor interest in bond-i (blockchain operated new debt instrument) has been strong. The World Bank and CBA expect to launch the transaction following a period of consultation with a broader set of investors.
http://www.worldbank.org/en/news/press-release/2018/08/09/world-bank-mandates-commonwealth-bank-of-australia-for-worlds-first-blockchain-bond
https://www.commbank.com.au/guidance/newsroom/cba-picked-by-world-bank-to-deliver-world-s-first-standalone-blo0-201808.html?ei=card-view
20 April 2018 - National Bank of Canada (NBC) and J.P. Morgan test blockchain technology with NBC debt issuance in the US Financial Markets
J.P. Morgan has tested a new blockchain platform for issuing financial instruments with the National Bank of Canada and other large firms. The firm is seeking to streamline origination, settlement, interest rate payments and other processes.
The Canadian bank issued a $150m one-year floating-rate Yankee certificate of deposit, with a parallel simulation of the issuance, using blockchain technology. The blockchain test involved the parties mirroring the execution of the actual transaction through a debt issuance application developed by J.P. Morgan that runs on Quorum®, an open-sourced variant of the Ethereum blockchain, specifically designed to meet the needs of financial markets participants.
https://www.jpmorgan.com/country/GB/en/detail/1320566740924
https://www.nbc.ca/en/about-us/news/news-room/press-releases/2018/20180420-National-Bank-of-Canada-JP-Morgan-test-blockchain-with-debt-issuance.html
28 February 2018 - Telefónica Deutschland raises EUR 250 million in Schuldschein transaction including a blockchain tranche [English translation]
Telefónica Deutschland Holding AG has raised EUR 250 million through a Schuldschein issuance marketed by Landesbank Baden-Württemberg (LBBW) and DZ BANK AG. The initial target volume was exceeded by EUR 50 million. A tranche exclusively offered through LBBW, based entirely on blockchain technology, was three times oversubscribed. It was the first time that a two-digit number of investors linked up to the blockchain.
In light of strong demand, the size of the blockchain tranche was increased from EUR 50 million to EUR 75 million. Investors comprised CaixaBank S.A., Hamburger Sparkasse AG, Kreissparkassen Esslingen- Nürtingen and Ludwigsburg, LBBW, Stadtsparkasse Düsseldorf and Sparkassen Hegau-Bodensee, Hochfranken, Karlsruhe, Pforzheim-Calw, Vorderpfalz and Deutsche Postbank AG.
The regulatory requirements for a Schuldschein were met in parallel to the blockchain transaction. The tranche has a maturity of one year […].
https://www.lbbw.de/konzern/news-and-services/medien-center/presseinfos/20180208-lbbw-presseinformation-telefonica-deutschland-erzielt-250-mio.-euro-in-schuldscheintransaktion-mit-blockchain-tranche_7x1yujiz1_m.pdf
22 November 2017 - Nivaura executes world’s first automated cryptocurrency bond issuance supported by Allen & Overy
The world’s first fully automated cryptocurrency-denominated bond issuance that is also cleared, settled and registered on a public blockchain infrastructure was successfully completed today by Nivaura, a fintech company that has developed a cloud-based service for the issuance and administration of financial instruments by small and medium-sized issuers.
The Nivaura platform enables the issuance and administration of legally enforceable financial instruments at significantly lower cost than current channels. LuxDeco, an online retailer of luxury furniture and home decor accessories, issued ether-denominated bonds which were structured, executed and will be administered through the Nivaura platform. The transaction took place in Fuse – a tech innovation space based in Allen & Overy’s London offices – and was part of the Financial Conduct Authority’s regulatory sandbox, which allows businesses to test innovative products, services, business models and delivery mechanisms in the real market, with real consumers.
http://www.allenovery.com/news/en-gb/articles/Pages/Nivaura-executes-worlds-first-automated-cryptocurrency-bond-issuance-supported-by-Allen-Overy.aspx
25 September 2017 - Commerzbank, KfW and MEAG simulate security transaction via Blockchain
Commerzbank, KfW Banking Group and MEAG, the asset manager of Munich Re and ERGO, have jointly traded a Euro Commercial Paper (ECP) issued by KfW, and simultaneously replicated the transaction in a Blockchain. […] The security was sold to MEAG, and settled without a paying agent or a clearing system. This pilot transaction comprised a EUR 100,000 issuance volume with a five-day term.
In parallel to issuance and settlement, key transaction elements were replicated and simulated by means of distributed ledger technology, using the R3 Corda platform. For this purpose, the standard number of required intermediaries was reduced, this allowed for an immediate posting. In parallel a real-time replication of the transaction was done using distributed ledger technology.
https://www.kfw.de/KfW-Group/Newsroom/Latest-News/Pressemitteilungen-Details_434560.html
28 June 2017 - Daimler and LBBW successfully utilize blockchain technology for launch of corporate Schuldschein
Daimler and LBBW successfully tested this innovative technology for capital markets in parallel with the process that is required by regulatory authorities. Through LBBW, Daimler launched a €100 million 1 year corporate Schuldschein within which savings banks (Kreissparkasse) Esslingen-Nürtingen, Ludwigsburg and Ostalb as well as LBBW acted as lenders. The entire transaction — from the origination, distribution, allocation and execution of the Schuldschein loan agreement to the confirmation of repayment and of interest payments — was digitally carried out via blockchain technology in cooperation with the IT subsidiaries TSS (Daimler) and Targens (LBBW).
https://media.daimler.com/marsMediaSite/en/instance/ko.xhtml?oid=22744703
https://www.lbbw.de/articlepage/experience-banking/pilot-project-blockchain-daimler-lbbw_661e61yw9_e.html
25 January 2017 - Commonwealth Bank and QTC create first government bond using blockchain
The transaction marks the first trial of Commonwealth Bank’s private, permissioned blockchain platform for the end-to-end issuance of bonds.
Queensland Treasury Corporation (QTC) successfully used the blockchain to generate a bond tender, view investor bids in real time, finalise investment allocation and settle instantly with investors. QTC acted in both the issuer and investor role to test the end-to-end process for the issuance.
The QTC bond was created in digital form using smart contract technology, and has the ability to automatically pay coupons to the current holder when due. The bond is a working prototype, is not tradable and does not carry any debt obligation.
https://www.commbank.com.au/guidance/newsroom/CBA-and-QTC-create-first-government-bond-using-blockchain-201701.html?ei=gsa_newsroom_QTC
Contact:
Gabriel Callsen
Senior Director, FinTech and Digitalisation; Secretary to the ICMA FinTech Advisory Committee (FinAC)
Direct line: +44 20 7213 0334
13 June 2024 – New York, LTX, a Broadridge Company, Introduces GenAI-Powered List Trading Functionality
This innovation allows users to leverage GPT technology to generate and execute multiasset class, multi-directional trade lists seamlessly via RFQ+. Jim Kwiatkowski, CEO of LTX, highlighted that the new functionality builds on LTX's foundation of using powerful AI and advanced trading protocols like RFQ+ and RFX to enhance efficiency, save time, and offer greater flexibility in trading strategies. This new capability addresses the ongoing need to streamline workflows, integrating GenAI into pre-trade and trade execution processes.
The introduction of this functionality coincides with the one-year anniversary of LTX’s GenAI application, BondGPT. Within the LTX platform, traders can now use BondGPT to easily generate lists of bonds based on specific criteria, then seamlessly construct, and execute their list of trades. Additionally, traders can define rules for auto-execution, which enhances workflow efficiency. BondGPT+ users can further optimize their portfolio management by applying GenAI to their inventory and positions to inform portfolio construction decisions.
https://www.broadridge.com/press-release/2024/ltx-releases-genai-powered-listtrading-functionality
6 June 2023 - LTX by Broadridge Launched BondGPT Powered by OpenAI GPT-4
BondGPT powered by OpenAI GPT-4 offers a large language model (LLM) chat function that allows users to ask questions and identify corporate bonds on the LTX trading platform based upon the user’s criteria. The new, conversational interface leverages LTX’s Liquidity Cloud and patent-pending bond similarity technology, which filters based upon a vast set of user-adjusted parameters to assist in identifying bonds with similar characteristics to meet traders’ real-time liquidity needs.
https://www.broadridge.com/press-release/2023/ltx-by-broadridge-launches-bondgpt
2 November 2022 - MAS pilot conducts foreign exchange and government bond transactions against liquidity pools comprising of tokenised bonds and fiat currencies
31 October 2022 - RBI wholesale Digital Rupee pilot for settlement of secondary market transactions in government securities
https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=54616
13 April 2022 - Generali Investments purchases EIB security tokens on secondary market
9 February 2022 - Charles River and LedgerEdge announced collaboration to provide DLT-enabled corporate bond liquidity and trading services
Charles River Development, a State Street Company, announced a collaboration with LedgerEdge to provide investment firms with access to corporate bond liquidity from the LedgerEdge ecosystem via the Charles River Inventory Hub and Order and Execution Management System (OEMS). LedgerEdge leverages distributed ledger technology (DLT) to modernize institutional-grade trading services and protocols in the $41 trillion global corporate bond market. Clients exercise full control of their data while gaining greater clarity into available liquidity, counterparties and execution quality. Charles River’s Inventory Hub delivers an aggregated, venue and dealer agnostic view of liquidity that helps firms reduce execution costs and facilitate price discovery. Traders can view inventory in the OEMS, receive updated indications of interest and quotes, and place orders for a full range of products.
https://www.crd.com/news/press-releases/2022/charles-river-and-ledgeredge-announce-collaboration
https://ledgeredge.com/news/charles-river-and-ledgeredge-announce-collaboration-to-provide-dlt-enabled-corporate-bond-liquidity-and-trading-services/
9 December 2021 - AXA IM completes first market transaction registered on Blockchain technology with Société Générale
AXA Investment Managers (AXA IM), in collaboration with Société Générale-Forge, announces that it has completed its first market transaction based on blockchain infrastructure.
Through its Fixed Income platform, AXA IM has purchased from Société Générale €3 million of “unsecured” bonds issued by the European Investment Bank (EIB) in the form of “security tokens” on the public blockchain Ethereum, on behalf of AXA France.
https://www.axa-im.com/axa-im-completes-its-first-market-transaction-registered-blockchain-technology-societe-generale
5 November 2020 - FSC authorises group buy platform for bonds in regulatory sandbox experiment
The Financial Supervisory Commission (FSC) approved the application by Joinvest Co. to begin a group buy platform experiment in the regulatory sandbox for one year. The experiment shall be limited to an approved range of items and time period, and are not bound by legal provisions listed in Subparagraph 6, Article 26 of the Financial Technology Development and Innovative Experimentation Act. In addition, the FSC has also agreed that Article 23-1 of the Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises is not applicable to the experiment during the period authorized. This has been the first approved financial technology innovation experiment since the FSC published the FinTech Development Roadmap on August 27, 2020.
The FSC indicated that Joinvest, after completing an counseling process, submitted its application on July 9, 2020, and is the second startup team in the FinTech Space that has received approval to take part in a sandbox experiment. The company employs technology innovation in its securities brokerage and proprietary businesses, which mainly focus on platform services that provide group buying of local and foreign bonds. The company uses blockchain technology to record all transaction data, and it also uses trust services provided by the First Bank to protect investors. Bonds generate higher yields than time deposits, and are still relatively safe. However, the investment threshold is high, so the experiment aims to enable retail investors to invest in bonds for only NT$ 100 or USD 10. The design will satisfy the need of ordinary investors to hold bonds under the current low-interest environment. Moreover, the transactions will be executed completely online, which is in line with the current trend on digital finance and promotion of financial inclusion.
https://www.fsc.gov.tw/en/home.jsp?id=54&parentpath=0,2&mcustomize=multimessage_view.jsp&dataserno=202011250001&ou=multisite,ou=english,ou=ap_root,o=fsc,c=tw&dtable=News
14 October 2020 - BondEvalue Gets MAS Approval to Operate The BondbloX Bond Exchange
Singapore-based fintech BondEvalue has been approved as a Recognised Market Operator (RMO) by the Monetary Authority of Singapore (MAS). It operates BondbloX Bond Exchange (BBX), the world’s first blockchain-based bond exchange, and aims to bring trading of a wide range of fixed-income securities to the mass market across the region.
BondEvalue officially graduated from the MAS’ regulatory sandbox on 1 October 2020. The move means that BondEvalue has successfully concluded proof of technology and business model. It is now no longer bound by restrictions such as limits on trading volume and disclosures specific to the sandbox model.
https://bondevalue.com/news/bondevalue-gets-mas-approval-to-operate-the-bondblox-bond-exchange/
12 August 2020 - Singapore fintech BondEvalue brings bond trading to masses with BondbloX, world’s first blockchain-based bond exchange; goes live with first trade
Singapore fintech BondEvalue launched BondbloX Bond Exchange (BBX), the first blockchain-based exchange that makes possible fractional ownership of bonds by allowing them to be traded in smaller denominations of US$1,000. This paves the way for many more investors to buy and sell bonds, making bond trading much faster, highly transparent and at lower cost. In Asia and Europe, bond trading is traditionally the preserve of affluent individuals, institutions and corporations as they are typically traded in unit size US$200,000 in the secondary market. Trading is also carried out over the counter (by phone) making for an opaque process and pricing.
Settlement on BBX is on a T+0 basis, that is within seconds instead of the normal two-day settlement cycle, thereby reducing counterparty settlement risks for investors. Investors around the world can trade on BBX via web and mobile devices by opening an account with their banks, wealth managers, family offices or robo-advisors, subject to individual country restrictions on bond trading. In Singapore, BBX is open to accredited and institutional investors.
The first trade was between a Singapore citizen and a buyer who is a Singapore permanent resident. The transaction was for US$8,000 of BondbloX representing the underlying Olam 4.375% bond maturing 2023 at a price of 100.25%, executed through Taurus Wealth Advisors, the first member of BBX. BondEvalue said it has signed up one of Singapore’s largest brokerages, UOB Kay Hian, as its Initial Launch Partner, US’ Northern Trust as Designated Custodian and multi-family Office Taurus Wealth Advisors, as one of the first members of the exchange. More partners are in the pipeline and will be onboarded in the coming months.
https://bondevalue.com/news/the-bondblox-bond-exchange-goes-live/
4 November 2019 - BondEvalue Unveils BondbloX – World’s First Blockchain-Based Bond Exchange
Singapore based BondEvalue today announced that it has been approved to enter the Monetary Authority of Singapore’s (MAS) Sandbox Express to launch a blockchain-based bond exchange. The platform will offer a unique proposition to reduce the minimum investment amount of bonds to US$1,000 via BondbloX. BondbloX is a fraction of a conventional US$200,000 bond wherein each BondbloX has a denomination of US$1,000.
The platform connects to banks, wealth managers and robo-advisors across the world, allowing their customers (limited to accredited investors in Singapore) to trade BondbloX. BondEvalue’s bond exchange is built on Hyperledger Sawtooth – a modular platform for building, deploying and running distributed ledgers.
https://bondevalue.com/news/bondevalue-unveils-bondblox-worlds-first-blockchain-based-bond-exchange/
https://www.mas.gov.sg/development/fintech/sandbox-express
23 October 2019 - Commerzbank, Deutsche Börse and MEAG to reach further step in post-trade services using distributed ledger technology
Commerzbank, Deutsche Börse and MEAG, the Asset Manager of Munich Re and ERGO, have reached a further step in examining the scope of distributed ledger technology in post-trade services. The partners successfully completed the settlement of a legally binding secondary market securities transaction via tokens; Commerzbank further used the tokenized cash as collateral at Eurex Clearing as Central Counterparty. The prototype scenario reflected a delivery-versus-payment transaction and the transfer of tokenized cash, aiming on exploring the potential of various comprehensive services leveraging distributed ledger technology.
For this transaction, digital tokens were generated using both commercial bank money (cash tokens) and securities (securities tokens). The simultaneous swap of the tokens as final and binding settlement was enabled by using distributed ledger technology. As a further use case for cash tokens, Commerzbank provided the tokenized cash credits for coverage of margin requirements to Eurex Clearing as Central Counterparty as part of their operative risk management. Eurex Clearing acted as tokenizer of cash, MEAG as the buyer of securities and Commerzbank as the seller and the custodian of the securities tokens. Main incubator, Commerzbank’s research and development unit, provided the blockchain platform.
https://www.commerzbank.com/en/hauptnavigation/presse/pressemitteilungen/archiv1/2019/quartal_19_04/presse_archiv_detail_19_04_84170.html
https://www.deutsche-boerse.com/dbg-en/media/press-releases/Commerzbank-Deutsche-B-rse-and-MEAG-to-reach-further-step-in-post-trade-services-using-distributed-ledger-technology--1631510
23 September 2019 - SIX Digital Exchange launches DLT-based trading and settlement prototype
SDX, the world’s first end-to-end platform for digital assets, has launched a prototype of its digital exchange and CSD. Future releases will offer more functionality, with a particular emphasis on asset servicing, in Q1 2020. The full launch is expected in Q4 2020. The objective of the prototype is to showcase the future of financial markets to the community and obtain feedback as well as demonstrate that a distributed CSD – based on DLT – can be integrated with a central order-book stock exchange model to ensure fair market conditions for all.
Test-cases will showcase the potential of SDX’s riskless trading model, as well as settlement on DLT. Early stage functionality will cover digital security token issuance as well as live trading and instant settlement. This will include the cash-leg of the transaction embracing the concept of a payment token as well as access to a distributed portal where it would be possible to monitor transactions across specific DLT member nodes.
https://www.six-group.com/en/home/media/releases/2019/20190923-six-sdx-update.html
15 May 2019 - World Bank and CBA Partner to enable Secondary Bond Trading recorded on Blockchain
The International Bank for Reconstruction and Development (World Bank) and Commonwealth Bank (CBA) have enabled secondary market trading recorded on blockchain for bond-i (blockchain operated new debt instrument), making this the first bond whose issuance and trading are recorded using distributed ledger technologies.
The successful completion of a secondary transaction with trading activity recorded on a distributed ledger illustrates the vast potential to enhance the co-ordination of securities trading and management on blockchain – delivering a verified, permanent record and instant reconciliation. The functionality was developed by CBA in conjunction with World Bank and market maker TD Securities. The World Bank issued bond-i in August 2018, which was the world’s first bond to be created, allocated, transferred and managed through its life cycle using distributed ledger technology. CBA was the sole arranger for the bond.
https://www.worldbank.org/en/news/press-release/2019/05/15/world-bank-and-cba-partner-to-enable-secondary-bond-trading-recorded-on-blockchain
https://www.commbank.com.au/guidance/newsroom/world-bank-and-cba-blockchain-bond-201905.html
11 April 2019 - TCS Powers World’s First Cross-Border Securities Settlement between Two Central Depositories using Quartz Blockchain
Tata Consultancy Services (TCS), (BSE: 532540, NSE: TCS), a leading IT services, consulting and business solutions organization, has announced the world’s first successful cross-border securities settlement between two central securities depositories (CSDs) – Maroclear, the CSD of Morocco, and Kuwait Clearing Company, the CSD of Kuwait – using cash coins on the BaNCS Network, powered by Quartz Blockchain. […]
In tests run by the two CSDs, a set of equities and fixed income securities from both the Kuwaiti and Moroccan markets were created on the BaNCS Network implemented on Quartz Blockchain, along with segregated accounts to hold these securities. The cross-border settlement instructions for these securities were matched and settled instantaneously on the blockchain ledger using Quartz’s Smart Solution for Cross-Border Settlements. The associated notifications on the status of transactions were published on the BaNCS Network and instantaneously made available to the respective CSDs. These transactions were settled using cash coins held in the Quartz Blockchain in a true delivery versus payment (DVP) settlement model.
https://www.tcs.com/tcs-powers-world-first-cross-border-securities-settlement-between-two-central-depositories-using-quartz-blockchain#section_1
11 March 2019 - Deutsche Börse, Swisscom and Sygnum enter into strategic partnership to build a trusted digital asset ecosystem
Deutsche Börse Group, one of the world’s largest market infrastructure providers, Swisscom, the leading Swiss Information and Communication Technology (ICT) company and one of its leading IT service providers, and Sygnum, a Swiss and Singapore-based financial technology company in the regulatory process to obtain a Swiss banking and securities dealer license, have entered into a strategic partnership. The aim of this cooperation is to jointly build out and grow a trusted and regulatory compliant financial market infrastructure for digital assets.
The tokenization of assets, the next major phase of asset digitization, has the potential to reshape global financial markets. In order to fully unfold its potential, the emerging tokenized economy needs a trusted, comprehensive and regulatory compliant ecosystem. This integrated ecosystem around digital assets, developed by strong and experienced partners, will enable investors to tap into these new asset classes and accommodate to future client needs. The core elements of the solution will include issuance, custody, access to liquidity, and banking services – all leveraging Distributed-Ledger-Technology (DLT) in a regulatory compliant environment. […]
The first products and services provided by the new ecosystem for digital assets are expected to be launched in the course of 2019.
https://deutsche-boerse.com/dbg-en/media/press-releases/Deutsche-B-rse-Swisscom-and-Sygnum-enter-into-strategic-partnership-to-build-a-trusted-digital-asset-ecosystem-1507212
12 December 2018 - solarisBank supports Boerse Stuttgart Group in the development of the trading system for its crypto trading venue
As a technology and banking partner, solarisBank supports Boerse Stuttgart Group in creating an end-to-end infrastructure for digital assets. Together with solarisBank, Boerse Stuttgart Group is developing the trading system for its crypto trading venue, which is set to launch in the first half of 2019. In addition, solarisBank will provide the required crypto trading banking services to Boerse Stuttgart Group.
To begin with, established crypto currencies such as Bitcoin or Ethereum will be available for trading on Boerse Stuttgart Group’s trading venue. Once the ICO platform of Boerse Stuttgart Group, which is currently being developed, has gone live, tokens issued there will also be available for trading in the secondary market. The crypto trading venue is open to both private and institutional investors and facilitates order opportunities comparable to securities trading. Open order books provide information about existing orders and the current market situation at all times. Investors’ orders are executed according to fixed rules. Regulation as a multilateral trading facility (MTF) is being sought for the crypto trading venue.
https://www.boerse-stuttgart.de/en/company/news/media-relations/media-releases/?ID_NEWS=1438
11 November 2018 - MAS and SGX successfully leverage blockchain technology for settlement of tokenised assets
The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) have successfully developed Delivery versus Payment (DvP) capabilities for the settlement of tokenised assets across different blockchain platforms. This will help simplify post-trade processes and further shorten settlement cycles.
The DvP prototypes, developed with technology partners Anquan, Deloitte and Nasdaq, demonstrated that financial institutions and corporate investors are able to carry out the simultaneous exchange and final settlement of tokenised digital currencies and securities assets on different blockchain platforms. The ability to perform these activities simultaneously improves operational efficiency and reduces settlement risks. The collaboration also demonstrated that DvP settlement finality, interledger interoperability and investor protection can be achieved through specific solutions designed and built on blockchain technology. Following its conclusion, MAS and SGX have jointly published an industry report, which provides a comprehensive view of automating DvP settlement processes with Smart Contracts.
http://www.mas.gov.sg/News-and-Publications/Media-Releases/2018/MAS-and-SGX-successfully-leverage-blockchain-technology-for-settlement-of-tokenised-assets.aspx
6 November 2018 - DTCC Enters Test Phase on Distributed Ledger Project for Credit Derivatives with MarkitSERV & 15 Leading Global Banks
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that it has advanced to the testing phase of its ground-breaking project to re-platform its credit derivatives Trade Information Warehouse (TIW) on distributed ledger technology (DLT) and cloud.
In this phase, 15 of the world’s largest global banks are conducting end-to-end, structured user acceptance tests, leveraging simulated use cases and test data and validating the interaction between systems, firms and other key market infrastructure providers, including MarkitSERV and its new platform for credit, TradeServ. Upon successful completion, DTCC expects to move to an “open” testing phase by the end of the year, when other market participants and service providers will have the opportunity to test. Testing is anticipated to be completed by Q1 2019 with go live scheduled thereafter.
http://www.dtcc.com/news/2018/november/06/dtcc-enters-test-phase-on-distributed-ledger-project-for-credit-derivatives-with-markitserv
25 October 2018 - Deutsche Bundesbank and Deutsche Börse successfully complete tests for blockchain prototypes
Deutsche Bundesbank and Deutsche Börse have successfully completed the performance tests of their jointly specified prototypes for securities settlement based on blockchain technology. The prototypes support the settlement of securities transactions, payments, interest payments and repayments at the maturity of a bond. It was developed on both Hyperledger Fabric (version 1.0) and the Digital Asset Platform and subjected to demanding performance tests.
The blockchain-based prototypes are a result of a collaborative research project between Deutsche Börse and the Deutsche Bundesbank to undertake blockchain based settlement technology research (in short: BLOCKBASTER). You can find the essential results of the project in the joint publication "BLOCKBASTER, Final Report“.
https://www.bundesbank.de/en/press/press-releases/deutsche-bundesbank-and-deutsche-boerse-successfully-complete-tests-for-blockchain-prototypes-764698
https://www.bundesbank.de/resource/blob/764700/29feab3f9079540441e3abda1ed2d2c1/mL/2018-10-25-blockbaster-final-report-data.pdf
24 October 2018 - TCS Successfully Tests Blockchain-based Trade Settlements for Canadian Depository
Tata Consultancy Services (TCS), (BSE: 532540, NSE: TCS), a leading IT services, consulting and business solutions organization has announced the successful completion of a Proof of Concept (PoC) around a blockchain-based non-exchange trade settlement using TCS’ Quartz Blockchain Solution. Developed in collaboration with the Canadian Depository for Securities (CDS), a wholly-owned subsidiary of TMX Group, the PoC is part of a large market infrastructure transformation program leveraging TCS BaNCS for Market Infrastructure, aimed at the modernization of depository, clearing and settlement services in Canada.
The PoC helped demonstrate how Delivery versus Payment (DVP) trade settlement can be completed using tokenized assets held on the Quartz blockchain ledger. It used a unique co-existent architecture comprising conventional and blockchain technologies, leveraging TCS’ Quartz Blockchain Solution’s support for co-existence and a choice of messaging standards, including ISO/FIX/FIXML etc, for data exchange with the ledger. In addition, it can be extended in the future to support interoperability with external blockchain networks, such as for cash settlement.
https://www.tcs.com/tcs-successfully-tests-blockchain-based-trade-settlements-canadian-depository
24 August 2018 - MAS and SGX partner Anquan, Deloitte and Nasdaq to harness blockchain technology for settlement of tokenised assets
The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) today announced a collaboration to develop Delivery versus Payment (DvP) capabilities for settlement of tokenised assets across different blockchain platforms. This will allow financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenised digital currencies and securities assets, improving operational efficiency and reducing settlement risks.
Three companies, Anquan, Deloitte and Nasdaq have been appointed as technology partners for this project. They will leverage on the open-source software developed and made publicly available in Project Ubin Phase 2. The project will produce a report that examines the potential of automating DvP settlement processes with Smart Contracts and identify key design considerations to ensure resilient operations and enhanced protection for investors. The report will be released by November 2018.
http://www.mas.gov.sg/News-and-Publications/Media-Releases/2018/MAS-and-SGX-partner-Anquan-Deloitte-and-Nasdaq-to-harness-blockchain-technology.aspx
2 August 2018 - Boerse Stuttgart Group creates end-to-end infrastructure for digital assets
Boerse Stuttgart Group is creating an end-to-end infrastructure for digital assets. After the start of cryptocurrency trading via BISON, there will soon be a platform for initial coin offerings (ICOs), a multilateral trading venue for cryptocurrencies as well as solutions for safe custody. Boerse Stuttgart Group thus continues to pursue its digitisation strategy and is becoming a pioneer for the digital transformation of financial markets and financial products.[…]
After the launch of BISON in the autumn, Boerse Stuttgart Group will be extending its activities to the primary and secondary markets. An ICO platform will allow the issuance of digital tokens, for corporate financing or to represent rights and assets, for instance. The platform will also make it possible to carry out ICOs with standardised and transparent processes.
https://www.boerse-stuttgart.de/files/180802_mr_infrastructure_for_digital_assets.pdf
6 July 2018 - SIX to launch full end-to-end and fully integrated digital asset trading, settlement and custody service
Switzerland's stock exchange - owned and managed by SIX - announced that it is building a fully integrated trading, settlement and custody infrastructure for digital assets. SIX is fully regulated as an operator of Financial Market Infrastructure (FMI) by Swiss Authorities, FINMA and the Swiss National Bank, and intends that the planned 'digital asset ecosystem' - SIX Digital Exchange ("SDX") - will enjoy the same standard of oversight and regulation. […]
SIX Digital Exchange will be the first market infrastructure in the world to offer a fully integrated end to end trading, settlement and custody service for digital assets. The service will provide a safe environment for issuing and trading digital assets, and enable the tokenization of existing securities and non-bankable assets to make previously untradeable assets tradeable.
https://www.six-swiss-exchange.com/news/overview_en.html?id=six_digital_exchange
Contacts:
Gabriel Callsen
Senior Director, FinTech and Digitalisation; Secretary to the ICMA FinTech Advisory Committee (FinAC)
Direct line: +44 20 7213 0334
13 December 2024: Societe Generale successfully completed a first repo transaction on public blockchain with the Banque de France
Societe Generale announced the successful completion of a collateralized market transaction fully executed on blockchain through its subsidiary Societe Generale - FORGE. This is the first repo transaction (Sale and Repurchase Agreement) in digital securities (Security Tokens) with an Eurosystem's central bank. Societe Generale deposited as collateral with the Banque de France some bonds issued in 2020 on the public Ethereum blockchain in exchange of Central Bank Digital Currency (CBDC) issued by the Banque de France on its DL3S blockchain.
This transaction demonstrates the technical feasibility of interbank refinancing operations directly on blockchain. It illustrates the potential of a Central Bank Digital Currency to improve the liquidity of digital financial securities. This pioneering deal demonstrates Societe Generale's commitment to leveraging its financial structuring expertise and SG-FORGE's technological capabilities to contribute building innovative financial markets.
11 November 2024: ABN AMRO executed four repo pilot trades with central bank money settlement with (DLT)
ABN AMRO has achieved a significant milestone by completing its second use case as part of the Eurosystem Central Bank Digital Currency (CBDC) trials. The ECB-organised trials, running from May 2024 to November 2024, offer institutions the chance to test euro central bank money settlement with Distributed Ledger Technology (DLT).
16 September 2024: Broadridge Announces First High-Quality Liquidity Asset Use Case for its Distributed Ledger Repo Platform
Broadridge Financial Solutions, Inc. (NYSE:BR) announced that a Tier-1 Canadian Bank has implemented its Distributed Ledger Repo (DLR) platform for High-Quality Liquid Asset (HQLA) treasury securities management. This collaboration marks a significant milestone as the bank becomes the first to go live with this groundbreaking HQLA use case through DLR, showcasing the potential of Distributed Ledger Technology (DLT) in transforming financial operations.
14 May 2024: Broadridge to offer JPM Coin as settlement mechanism for DLR platform
JP Morgan has struck a deal to offer its JPM Coin digital token as a settlement mechanism for Broadridge's DLR (Distributed Ledger Repo) platform. The DLR platform taps distributed ledger technology to offer Broadridge clients intra-day, overnight and term repo capabilities. The partnership will be the first time that JPM Coin - developed by JP Morgan's blockchain unit Onyx - will provide settlement capabilities to an external digital platform. JPM Coin will be available by June.
15 November 2023 - UBS, SBI and DBS complete world’s first cross-border repo with a natively-issued digital bond fully executed and settled on a public blockchain
Conducted as part of MAS’ Project Guardian, the transaction highlighted how blockchain technology enables cross-border distribution and real-time 24/7 settlement of capital market instruments in an efficient, flexible and cost-effective manner while enhancing liquidity management for institutions and abiding by compliance and security requirements.
The transaction involved a repo to borrow tokenized Japanese Yen (JPY) against a JPY-denominated natively-issued digital bond, with the borrowed tokenized JPY used to finance the purchase of the same bond. The subsequent digital bond redemption and payment of principal and interest at maturity was executed on-chain as well, demonstrating the potential to cover an entire transaction lifecycle on a public blockchain.
https://www.ubs.com/global/en/investment-bank/tokenize.html
3 April 2023 - UBS executes cross-border intraday repo trade on Broadridge DLR Platform
Broadridge Financial Solutions announced that UBS and a global Asian bank successfully executed the first cross-border intraday repo transaction on Broadridge’s blockchain enabled Distributed Ledger Repo (DLR) platform. The intraday trade marks the launch of the next phase in the rollout of Broadridge’s DLR platform. Continuing to build on the initial success of the platform and leveraging the growing expansion of the network across the global repo community, this is a major step forward to providing a more efficient means of intraday liquidity management.
15 February 2023 - First digital bond approved for SNB General Collateral Basket
At the beginning of 2023, the city of Lugano issued their first digital native bond on SIX Digital Exchange (ISIN: CH1232107172) with Zürcher Kantonalbank (ZKB) as sole lead manager. Following this issuance and based on the double listing on SDX Trading AG and SIX Swiss Exchange, the bond has become the first digital native asset accepted as eligible collateral for SNB repos.
This represents a major milestone in the adoption of digital bonds and another world first. As already iterated by Moodys, there is no difference in the risk factor analysis of a digital issuance on SDX in comparison with a traditional bond. All eligible securities are available online on the “SNB General Collateral Basket” website at collateral.snb.ch.
https://www.sdx.com/news/first-digital-bond-approved-for-snb-general-collateral-basket/
5 December 2022 - Fnality and HQLAᵡ conduct cross-chain repo swap pilot with Banco Santander, Goldman Sachs and UBS
Fnality and HQLAᵡ announced the successful completion of the first proof of concept (PoC) delivery versus payment (DvP) repo settlement across the Fnality Payment System (FnPS) and HQLAᵡ's Digital Collateral Registry, bridging the distributed ledger technologies (DLT) of Enterprise Ethereum and R3 Corda, respectively. The proof of concept was supported by the project participants – Banco Santander, Goldman Sachs and UBS - and achieved by connecting HQLAᵡ with the Ecosystem TestNet environment, simulating the Fnality Payment System, built in collaboration with Adhara.
The transactions were atomically settled across the two platforms, meaning that each system’s boundaries were respected (ie no collateral was represented on the FnPS, and no cash was represented on HQLAᵡ’s Digital Collateral Registry) and the swap only completed when both systems confirmed all criteria had been fulfilled. This also demonstrates how platforms running on different DLTs can be linked to deliver enhanced resilience, reduced risks, and reduction of fragmented liquidity. The success of the test means that Fnality, HQLAᵡ and their mutual clients can now focus on the use case implementation, bringing the possibility for intraday settlements one step closer to reality.
https://www.fnality.org/news-views/hqlax_crosschain_repo_swap_pilot
23 November 2022 - DBS complete intraday repurchase transaction on a blockchain based network
6 October 2022 - HQLAᵡ J.P. Morgan, Ownera and Wematch demonstrate a cross-ledger repo
HQLAᵡ, J.P. Morgan, Ownera and Wematch successfully demonstrated the technical feasibility of executing a delivery-versus-payment (DvP) repo transaction across two different distributed ledger technology (DLT) platforms at HQLAᵡ and J.P. Morgan. The demonstration showed how rights to securities, recorded in digital collateral records (DCRs) on the HQLAᵡ ledger, and digital cash, recorded at J.P. Morgan, could be recorded and transferred using two different DLT platforms. The simulated transaction was negotiated in the Wematch trading front-end. Ownera connected Wematch and the two distributed ledgers using the open-source FINP2P routing protocol, ensuring the visibility of assets in Wematch, and coordinating the DvP settlement across the HQLAᵡ and J.P. Morgan platforms.
https://www.hqla-x.com/post/hqlax-j-p-morgan-ownera-and-wematch-demonstrate-a-cross-ledger-repo
20 July 2022 - BNY Mellon and Goldman Sachs Settle First HQLAx Agency Securities Lending Transactions
13 July 2022 - EquiLend 1Source initiative to build centralised platform using DLT for securities financing
EquiLend, the global financial technology, data and analytics company for the securities finance industry, announced the EquiLend 1Source initiative, which aims to resolve the industry’s central pain points and risks, develop state-of-the-art technological solutions and efficiently transform the industry. At its core, the initiative aims to harness emerging technologies, such as distributed ledger, to develop an industry-wide “single source of truth” for transaction lifecycles in the securities finance industry. EquiLend 1Source takes a future-proof approach, enabling EquiLend to solve some of the industry’s most immediate concerns while preparing firms for additional developments and innovations to come.
The first undertaking of the EquiLend 1Source initiative will be to develop a means to eradicate reconciliation breaks and resulting settlement failures, which were identified by the working group as the most pressing issue in the industry due to their disruptive nature and high costs. The intended result is a centralized platform that: Serves as a single source of truth for securities finance lifecycle events and a universal source of data for the industry; Establishes operating procedures that produce predictable and consistent results for participants; Maintains a central record of the agreements made between parties; and Disseminates changes to all systems that maintain a copy of the shared truth. The solution is currently in the design phase along with Working Group members, with substantial commitment to the initiative from across the securities finance industry. The single source of truth will be open to all market participants and interoperable with any vendor, utility or other party interested in connecting.
14 June 2022 - Big banks trial intraday FX swap and repo trading platform
Treasury and technology teams from fourteen large banking groups, including NatWest Group, BNY Mellon’s corporate treasury function, Barclays, Citi and 10 additional banks have trialled a platform by London-based fintech Finteum. The solution helps banks to manage intraday liquidity through the development of new interbank markets. The platform will go live in 2023. The platform enables payment-vs-payment intraday FX swaps as well as delivery-vs-payment intraday repo transactions. The banks were headquartered across Europe, North America and Asia and were joined by representatives from national prudential authorities and liquidity experts from UK Finance, the collective voice for the banking and finance industry, who observed. The combined balance sheets of the participating banks was $19.8 trillion - among the largest group of banks ever to trial a new piece of market infrastructure.
The Finteum Platform is one of the first interbank venues to offer FX swaps and repo alongside each other in the same platform. Bank treasury teams use these two markets interchangeably for funding. FX swaps is among the largest markets in the world with more than $3.2 trillion of daily volume, according to the Bank for International Settlements. Repo volumes may be more than €3 trillion daily, according to the International Capital Market Association. However, for most market participants, overnight is still the shortest tenor in both markets. The Finteum Platform uses R3's Corda enterprise blockchain, along with the best possible settlement solutions, to deliver its market-first intraday FX swaps execution service, and for intraday repo. The settlement rails could include DLT-based technology such as the Fnality Payment System and non-DLT technology such as Euroclear Bank’s triparty infrastructure. During the trial, the banks engaged in simulated trading and discussion sessions, focused on the capabilities and features of the software, and its potential benefits. Over the course of one of the hour-long trading sessions the banks executed 96 simulated intraday FX swap and repo transactions, based on 75 simulated orders in a central limit order book and 165 bilateral RFQs, with a simulated total of $11.1bn traded.
https://www.globenewswire.com/en/news-release/2022/06/14/2461789/0/en/Finteum-NatWest-Group-BNY-Mellon-Barclays-and-11-Additional-Banks-Trial-Intraday-FX-Swap-and-Repo-Trading-Platform.html
https://www.linkedin.com/feed/update/urn:li:activity:6942387028248412160
31 May 2022 - MAS’s Project Guardian exploring DeFi applications in wholesale funding markets to pilot tokenised bonds for secured borrowing and lending
The Monetary Authority of Singapore (MAS) announced the commencement of Project Guardian, a collaborative initiative with the financial industry that seeks to explore the economic potential and value-adding use cases of asset tokenisation. Project Guardian was launched by Mr Heng Swee Keat, Deputy Prime Minister and Coordinating Minister for Economic Policies, at the Asia Tech x Singapore Summit. Project Guardian will test the feasibility of applications in asset tokenisation and DeFi while managing risks to financial stability and integrity. MAS aims to develop and pilot use cases in four main areas: a) Open, interoperable networks, b) Trust anchors, c) Asset tokenisation, and d) Institutional grade DeFi protocols. The first industry pilot under Project Guardian will explore potential DeFi applications in wholesale funding markets. The pilot, led by DBS Bank Ltd., JP Morgan and Marketnode, involves the creation of a permissioned liquidity pool comprising tokenised bonds and deposits. The pilot aims to carry out secured borrowing and lending on a public blockchain-based network through execution of smart contracts.
16 May 2022 - BNP Paribas trades intraday repo on J.P. Morgan’s Onyx Digital Assets platform
The benefit of using ODA as opposed to trading in the traditional repo market is that banks can quantify the exact amount of time it takes to complete a transaction with cash and treasuries being returned instantaneously. While in the repo market transaction are difficult to arrange within the same trading day, the service facilitates instant access to cash and the ability to define ‘to-the-minute’ contract maturities affording participants improved opportunities to optimise their USD cash and Treasuries.
13 September 2021 - Securities finance trade of a digital bond issued on a public blockchain initiated by Societe Generale and SG-Forge
Societe Generale and its subsidiary Societe Generale-Forge have realized a security finance transaction on a digital bond issued on a public blockchain, in cooperation with a German asset manager. Initially, the European Investment Bank (EIB) issued in April 2021 its first ever digital bond on the public blockchain Ethereum, in collaboration with Societe Generale and its regulated subsidiary Societe Generale-Forge. Societe Generale placed some of the digital bonds to a top tier German-based Asset Manager. Following the placing transaction, Societe Generale offered the client to enter into a collateral upgrade trade to optimize the holding of the EIB digital bond. This is the first time that a Digital Bond was borrowed via the blockchain and collateralized on a triparty agent on the back of a traditional contractual setup.
In the coming months, issuances of bonds on a public blockchain are expected to increase sharply. With this new transaction, Societe Generale Group, thanks to its structuring and engineering capability within its capital markets departments and Societe Generale-Forge, has built experience down the value chain in borrowing back a digital bond issued and distributed a few months ago. This secured financing trade is a great example of innovative use cases and gradual industrialization related to digital securities on distributed ledger technology.
https://www.sgforge.com/securities-finance-trade-digital-bond-on-public-blockchain/
14 June 2021 - Broadridge launches DLT Repo Platform to execute first bilateral repo trades using smart contracts
Broadridge Financial Solutions, Inc. (NYSE:BR), announced the successful go-live of its transformative distributed ledger repo (DLR) platform. Early participants of the blockchain-enabled platform are realizing significant and immediate benefits of reduced risk, operational costs and enhanced liquidity, while also accelerating their digitization journey. The launch builds on the success of multiple pilots with sell-side and buy-side firms.
DLR provides a single platform where market participants can agree, execute and settle repo transactions. Furthermore, DLR allows for the immobilization of the underlying securities in the repo transactions, while transferring ownership via smart contracts executed on the platform. The platform’s functionality significantly reduces the operating cost and risk of all repo activity, including intraday, overnight and term repos, both on a bilateral and an intracompany basis and also reduces counterparty risk while increasing auditability. In the first week since launch, DLR has executed $31B in average daily volume. Leveraging Broadridge’s leading fixed income trade processing platform, DLR utilizes Daml smart contracts from Digital Asset as well as VMware Blockchain, a highly scalable distributed ledger platform. DLR reduces operational risk and settlement cost for repurchase, or repo, agreements by providing a secure record of repo trade details, reducing the need for reconciliation and removing obstacles to straight-through-processing.
https://www.broadridge.com/press-release/2021/broadridge-launches-dlt-repo-platform
10 December 2020 - J.P. Morgan Executes Intraday Repo Transaction Using Blockchain
J.P. Morgan (NYSE: JPM) announced it completed a live, blockchain-based intraday repo transaction. The transaction was successfully conducted between J.P. Morgan’s broker dealer and banking entity, using an in-house developed blockchain application which supported instantaneous settlement and maturity of the transaction in hours, as opposed to days.
The repo market provides a widely used form of secured financing, however, current operational limitations prevent the meaningful use of such financing to meet intraday liquidity needs. Using blockchain enables borrowers and lenders to execute shorter-term, intraday repo transactions with real-time, simultaneous transaction settlement, creating new ways to access intraday liquidity. Both collateral and cash legs of the repo transaction were settled using blockchain, with the cash leg leveraging JPM Coin.
The offering will be made available in production to external counterparties in the U.S. – some of which have already simulated transactions on the new application. J.P. Morgan developed the solution and tested its viability by conducting trades between two of its affiliates, alongside successful simulations of trades with Goldman Sachs and other entities, with BNY Mellon as the triparty agent.
https://www.jpmorgan.com/news/jpmorgan-executes-intraday-repo-transaction-using-blockchain
28 July 2020 - Tel-Aviv Stock Exchange announces proposed launch of a Central Blockchain Securities Lending Platform
The Tel-Aviv Stock Exchange (TASE) announced the first-ever launch in Israel of a Central Blockchain Securities Lending Platform. The cutting-edge platform will transform the Securities Lending market in Israel by enabling direct lending among all the major financial instruments. The platform will function as a one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions. In March 2020, TASE members were given access to an initial testing environment, in order to test lending transactions in the new platform and adapt their systems in preparation for the production phase.
The use of Distributed Ledger Technology (DLT) as the basis of this new trading platform will harness some of the blockchain's primary advantages and features, such as direct peer-to-peer transactions, Smart Contract, and enhanced security through immutability. All of these are expected to benefit TASE, its custodians and their clients by reducing costs, increasing security and enabling the market to exploit its full potential.
https://info.tase.co.il/Eng/about_tase/news/2020/Pages/PR_20200728.aspx
5 May 2020 - OCC Selects Axoni to Modernize Securities Lending Infrastructure
The OCC announced it has selected Axoni to develop and implement a distributed ledger technology solution to replace its existing securities lending infrastructure. Development is slated to begin in the second quarter of 2020, and eventual deployment will be rolled out in various phases. The solution will be deployed using AxCore, Axoni's distributed ledger protocol, and is slated to be hosted in the cloud. The vision of the initial roll-out is to establish a permissioned distributed ledger network for cleared stock loan transactions, governed by OCC, with the potential for peer nodes at clearing member firms that will enable participants to have a real time, accurate copy of contract and activity information, thereby reducing the need for manual reconciliation. OCC, Axoni, and OCC clearing member firms have identified several opportunities to further streamline processing within the marketplace once the baseline platform has been established.
https://axoni.com/press/occ-selects-axoni-to-modernize-securities-lending-infrastructure/
https://www.theocc.com/about/newsroom/releases/2020/occ-selects-axoni-to-modernize-securities-lending-infrastructure.jsp
23 January 2020 - Deutsche Bundesbank and Deutsche Börse publish concept study on DLT-based collateral management
The Deutsche Bundesbank and Deutsche Börse have presented the results of a concept study on the use of distributed ledger technology (DLT) in the area of collateral management. This study outlines that, in principle, DLT is capable of delivering further benefits in terms of the velocity and usability of collateral. The two institutions are thus continuing their successful cooperation in researching the capabilities offered by securities settlement based on DLT technology.
Specifically, the joint study elaborates on a model where:
- tokens representing underlying securities and specific related rights are introduced;
- collateral – a specific ISIN or a basket of securities – is mobilized via tokens without any movement in the underlying assets;
- a specific trust function is introduced which secures the interests of the token holder with regard to the physical securities in custody.
11 December 2019 - BME launches a new blockchain-based collateral pledge management service
BME has successfully launched the process for the digitisation of the certification of collateral pledge using Blockchain technology, eliminating the need to use and exchange physical certificates. Renta 4 Banco has actively participated in the project and has already registered the first digital pledges, thus becoming the first users of the service, called Be DLT-Prenda.
This new development, which has been carried out in just 9 months, involves the digitalisation of processes and guarantees access to real-time information for all participants, in this way reducing the time needed for the constitution of a pledge from 24 hours to less than 10 minutes. In addition, it improves operational and risk control of the participants, who are given direct access to information to be able to validate the transactions associated with the constitution of the pledges.
https://www.bolsasymercados.es/ing/Media/Press-Release/20191211/nota_20191211_2/BME_launches_a_new_blockchain_based_collateral_pledge_management_service
3 December 2019 - Commerzbank, Credit Suisse and UBS execute first live transactions on the Deutsche Börse-HQLAx securities lending platform
Deutsche Börse and HQLAX successfully launched their jointly developed Distributed Ledger Technology (DLT) solution for frictionless collateral swaps in the securities lending market. The live transactions were executed by Commerzbank, Credit Suisse and UBS on the Eurex Repo F7-trading system. As part of these transactions, ownership of a basket of German government bonds and a basket of corporate bonds was swapped between UBS and Commerzbank, both using Clearstream Banking S.A. as custodian. This was followed by a cross-custodian swap between UBS and Credit Suisse, in which ownership of a basket of corporate bonds at Clearstream Banking S.A. and a basket of German government bonds at Euroclear Bank was exchanged without the need for securities to be physically moved between the collateral agents. Instead, the change in ownership was recorded on the digital collateral registry, which is one of the four layers of the HQLAX operating model and was built on Corda Enterprise, the commercial distribution of R3’s blockchain platform.
In addition to Commerzbank, Credit Suisse and UBS, over 15 market participants, including CIBC, Citi, Goldman Sachs and ING, are currently engaged in different phases of onboarding to the HQLAX platform. Meanwhile, J.P. Morgan is in the process of becoming the third tri-party agent in the HQLAX operating model, alongside Clearstream Banking S.A. and Euroclear Bank. This will add another important custody/collateral location to the solution, further increasing collateral mobilisation efficiencies for participants.
https://deutsche-boerse.com/dbg-en/investor-relations/news-and-services/press-releases/Commerzbank-Credit-Suisse-and-UBS-execute-first-live-transactions-on-the-Deutsche-B-rse-HQLAx-securities-lending-platform-1631518
https://www.commerzbank.com/en/hauptnavigation/presse/pressemitteilungen/archiv1/2019/quartal_19_04/presse_archiv_detail_19_04_85450.html
19 November 2019 - Sberbank obtains patent for solution to automate repo deals via blockchain
Sberbank is the first in Russia to have obtained a patent for a repo deals solution and an execution system that utilize distributed ledger technology. The solution was developed by the bank only. With the all-new solution, the parties to a deal can register the terms of a repurchase agreement inside a self-executable decentralized environment, i.e. sign a smart contract. Then the parties will sign the smart contract with their e-signatures via a distributed ledger, while the contract will meet the terms of the first part of the repo deal by transferring funds and securities to the parties.
The market price of securities is being monitored and put on a distributed ledger over the entire lifetime of a deal. Picking up signals from an external source, a smart contract will make mutual payments to the parties and close the deal automatically. The said system covers the entire end-to-end process, which puts off the table the issues of reconciliation and controversies between the parties, thus reducing risks for the bank and making financing more affordable for clients.
https://www.sberbank.com/news-and-media/press-releases/article?newsID=12fa3872-58e0-4d0b-9c7b-08d06dd5865e&blockID=7®ionID=77&lang=en&type=NEWS
1 November 2019 - Bursa Malaysia: Securities borrowing and lending: the blockchain path to building operational efficiencies
Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) has completed its first securities borrowing and lending (“SBL”) Proof-Of-Concept (“POC 1”) blockchain technology solution designed to increase the efficiency, speed and capacity in the securities lending supply and borrowing demand (“Lending Pool”). SBL POC 1 was executed and tested with technology partner Forms Syntron Information (HK) Ltd (“FORMS HK”), a subsidiary of Shenzhen Stock Exchange-listed Shenzhen Forms Syntron Information Co. Ltd., and industry collaborators Affin Hwang Investment Bank Berhad, CGS-CIMB Securities Sdn Bhd, Citibank Berhad, Kumpulan Wang Persaraan (Diperbadankan) and Malacca Securities Sdn Bhd.
SBL POC 1 was a successful test of a private-permissioned blockchain-driven SBL Lending Pool that can enhance market discovery, create increased efficiencies as well as build transparency and trust. It has secure, shared ledgers and smart contracts which enable instant and automated update of asset status. Information stored in the ledger, like records of trade negotiations and order confirmations, are immutable, auditable and traceable. It avoids the need for manual reconciliation, which may introduce errors due to disparate methods of trade negotiation and order confirmation recording.
http://www.bursamalaysia.com/corporate/media-centre/media-releases/6285
14 March 2019 - BME and RENTA 4 test Blockchain technology for collateral pledge
BME and Renta 4 Banco have carried out the first test for the digitisation of the certification process of collateral pledge using Blockchain technology, eliminating the need to use and exchange physical certificates. The proof of concept entailed the constitution and release of collateral pledged by Renta 4 Banco to cover customer’s positions at BME Clearing, BME’s central counterparty. Blockchain-based technology has made it possible to eliminate the creation and exchange of physical certificates in these transactions, digitising all the processes and ensuring that all participants in the Blockchain have access to the information in real time.
The proof has shown a reduction in the total times of end-to-end processes exceeding 80%. Moreover, the system will bring about a radical improvement in the participants’ operational and risk management as they will gain direct access to the information and participate in the validation of pledge agreements. his proof of concept has been fully developed by BME’s DLT-Lab, through which BME analyses and explores the use of Blockchain technology in the digitalisation of processes and new operational models for improving current financial processes, in collaboration with the regulators and different financial institutions. DLT-Lab has worked together with those infrastructures involved in the process and the BME subsidiaries BME Clearing, the Spanish central securities depository IBERCLEAR and Renta 4 Banco as the pilot firm.
https://www.bolsasymercados.es/ing/Media/Press-Release/20190314/nota_20190314_2/BME_and_RENTA_4_test_Blockchain_technology_for_collateral_pledge
6 March 2019 - Commerzbank and Deutsche Börse execute legally binding securities settlement using distributed ledger technology
Commerzbank and Deutsche Börse have for the first time successfully used distributed ledger technology to execute a legally binding settlement of a repo transaction. The prototype transaction based on delivery versus payment was executed as part of a joint proof of concept examining the possible use of blockchain technology in securities settlement.
For the transaction, digital tokens were generated for both commercial bank money (cash tokens) and securities (securities tokens). Distributed ledger technology was then used to execute the simultaneous swap of the tokens as a legally binding transaction. Deutsche Börse acted as the cash provider, Commerzbank as the borrower and main incubator, Commerzbank’s research and development unit, acted as the blockchain platform operator. The technology used and the underlying legal concept were developed jointly by the partners. […] The repo transaction is based on a public note of KfW Bank Group (ISIN DE000A2LQSP7) amounting to EUR 10 million and a seven-day term with a negative interest rate of -0.5%.
https://deutsche-boerse.com/dbg-en/media/press-releases/Commerzbank-and-Deutsche-B-rse-execute-legally-binding-securities-settlement-using-distributed-ledger-technology-1506684
https://commerzbank.com/en/hauptnavigation/presse/pressemitteilungen/archiv1/2019/quartal_19_01/presse_archiv_detail_19_01_79306.html
29 January 2019 - Deutsche Börse and HQLAᵡ make significant progress on blockchain securities lending solution
The development of the HQLAx target operating model, an innovative blockchain solution for collateral swaps in the securities lending market by Deutsche Börse Group and HQLAx, is showing significant progress. […] Following extensive testing during deployment over the past months, the technical set-up is close to final, as is the legal and regulatory framework. Six banks already confirmed that they have started their onboarding processes and will join the platform at launch date, which is expected in the first half of 2019.
Unlike in traditional settlement, there will be no actual movement of securities between custody accounts on the HQLAx target operating model. Instead, tokens will be transferred while the underlying securities will be kept off-blockchain and remain static. This helps market participants to redistribute liquidity more efficiently by providing collateral mobility across systems and locations. The platform will be accessed via Deutsche Börse’s Eurex Repo trading system. A trusted third party layer will be the interface between the distributed ledger technology (DLT) and legacy securities infrastructure leveraging well-established triparty collateral management services.
https://www.deutsche-boerse.com/dbg-en/media/press-releases/Deutsche-B-rse-and-HQLAX-make-significant-progress-on-blockchain-securities-lending-solution--1413678
https://www.hqla-x.com/dbg_jan2019/
6 December 2018 - Sberbank, BC Region and the NSD enter into world’s first three-way repo deal using blockchain technology
With the participation of the National Settlement Depository (NSD), Sberbank and Brokerage Company Region entered into a three-way OTC repo deal using a smart contract on a blockchain network. The deal involved a rouble-denominated OTC repo secured by federal loan bonds (OFZs). From a legal point of view, the deal is governed by Russian law and is a binding financial contract that was signed electronically using a smart contract and e-signatures via the CMS of the NSD.
The deal had three parties: the seller – Sberbank, the buyer – BC Region, and the settlement agent – the NSD. Interaction between the parties was fully automated and took place on a blockchain network. Each participant submitted an instruction to its node in the network, after which the smart contract concluded the deal and submitted settlement instructions to the NSD’s clearing system. The NSD’s CMS platform was used to carry our settlements, which allowed the participants of the repo deal to automate the execution of margins, settlement functions and repository reporting.
https://www.sberbank.com/news-and-media/press-releases/article?newsID=b6bc47f0-f45e-4062-a4de-17e1efe02ca0&blockID=7®ionID=77&lang=en&type=NEWS
19 June 2018 - ABN AMRO Clearing, EuroCCP, Euroclear and Nasdaq partner on blockchain based margin and collateral solution
ABN AMRO Clearing, EuroCCP, Euroclear and Nasdaq have completed a joint proof of concept to make the use of securities more efficient when used to cover margin calls, including after business hours, using blockchain, or distributed ledger technology (DLT). This solution addresses significant business challenges and inefficiencies related to the current provision of collateral to Central Counterparties (CCPs) and has demonstrated that a shared, resilient network can be built between collateral givers, collateral takers and intermediaries. […] The underlying collateral transfers were processed by Euroclear’s Central Securities Depository, ensuring settlement finality and regulatory compliance.
https://euroccp.com/2018/06/19/industry-stakeholders-partner-on-blockchain-based-margin-and-collateral-solution/
25 May 2018 - Tel-Aviv Stock Exchange, Accenture and The Floor Announce the Development of a New Blockchain Securities Lending Platform Powered by Intel
There is currently no central securities lending platform in the Israeli market. Securities Lending is at present executed in the capital market, primarily using inter-bank mechanisms within, and if necessary outside, banking group limits. As a result, the market has not been fully exploited to satisfy the potential needs of economic agents. The purpose of this project is to create one central platform that will transform the Securities Lending market in Israel by enabling direct lending among all the major financial instruments. The platform will function as a one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions.
Hyperledger Sawtooth is the infrastructure on which the project is based – an enterprise Blockchain platform for building Distributed Ledger (DLT) applications. Intel collaborated with Accenture and TASE and The Floor to deliver a private ledger on Hyperledger Sawtooth that utilizes Intel® Software Guard Extensions (Intel® SGX) technology to encrypt transaction data. This innovative enhancement helps keep data private among transaction participants and provides closed DLT platform members with additional confidentiality capabilities.
https://info.tase.co.il/Eng/about_tase/news/2018/Pages/PR_20180516.aspx
10 May 2018 - Broadridge Secures Industry-Leading Blockchain Patent for Proxy Processing and Repo Agreements
Broadridge Financial Solutions, Inc. today announced that the U.S. Patent and Trademark Office granted U.S. Patent No. 9,967,238 (the “‘238 Patent”) directed to blockchain technology that will enhance the processes for proxy voting and repurchase, or repo, agreements. […] Building upon Broadridge’s successful blockchain-based bilateral repo pilot with two global investment banks, which showed how blockchain technology can increase operational efficiency, reduce risk and improve auditability, the ‘238 Patent demonstrates how Broadridge’s technology can streamline reconciliation processes, improve data management and reduce non-value added costs. It will also expand Broadridge’s end-to-end proxy solution suite, leveraging the firm’s collaboration with three leading global banking institutions to employ blockchain technology to enhance global proxy vote transparency and analytics.
https://www.broadridge.com/press-release/2018/broadridge-secures-industry-leading-blockchain-patent
26 March 2018 - Deutsche Börse Group and HQLAX partner to build securities lending solution on the R3 Corda blockchain platform
Deutsche Börse Group and HQLAX have signed a Letter of Intent to form a strategic partnership for the creation of an innovative securities lending solution using the R3 Corda blockchain platform. […] In a traditional settlement of a securities lending transaction, underlying securities are transferred between custody accounts. In the HQLAX operating model, legal title transfer of baskets of securities will be achieved by the transfer of ownership of HQLAX Digital Collateral Records (DCRs) while the underlying securities remain static within unique DCR-linked custody accounts. The use of DCRs to effect transfers of securities will enhance regulatory transparency, mitigate systemic risk, reduce operational risk, and help financial institutions mobilise collateral and manage capital more efficiently.
http://deutsche-boerse.com/dbg-en/media-relations/press-releases/Deutsche-Boerse-Group-and-HQLAX-partner-to-build-securities-lending-solution-on-the-R3-Corda-blockchain-platform/3357600
1 March 2018 - Credit Suisse and ING execute first live transaction using HQLAx securities lending app on R3's Corda blockchain platform
Credit Suisse and ING swapped baskets of securities of value EUR 25 million using the HQLAX Corda-based collateral lending application.
During the transaction, Credit Suisse and ING agreed to transfer legal ownership of Dutch and German government securities on the platform using HQLAX Digital Collateral Records (DCRs) while the underlying securities remained static within unique DCR-linked custody accounts held by Credit Suisse and ING at Credit Suisse (Switzerland) Ltd.
https://www.credit-suisse.com/corporate/en/articles/media-releases/cs-and-ing-execute-first-live-transaction-201803.html
23 January 2018 - Announcing Oxygen, the first CryptoRepo trading platform
Oxygen has announced the launch of the world’s first decentralized CryptoRepo trading platform. Oxygen integrates repo, an essential building block for liquid and efficient financial markets, into the crypto economy. The platform will provide crypto asset holders opportunities to earn additional income, raise liquidity and take investment views across a wide range of cryptocurrencies, coins and tokens.
In а CryptoRepo transaction, one party borrows crypto assets from another party and commits to return these assets with interest at a future date. The Borrower provides crypto assets to the Lender as collateral, creating a secured digital transaction using an Ethereum-based Smart Contract.
https://oxygen.trade/news/announcing-oxygen-the-first-cryptorepo-trading-platform/
17 October 2017 - Broadridge Successfully Completes Pilot of Blockchain-Based Bilateral Repo Solution
Broadridge Financial Solutions, Inc. (NYSE:BR), announced today the successful completion of a pilot with Natixis and Societe Generale which leverages blockchain technology to enhance the operational efficiency and auditability of bilateral repurchase, or repo, agreements.
The pilot utilizes distributed ledger technology capabilities to reduce operational risk for market participants by providing a secure record of repo trade details, reducing the need for reconciliation and removing obstacles to straight through processing. This new blockchain-enabled solution, which automates end-to-end processes, streamlines the repo agreement and confirmation processes, offers a faster and more accurate collateral substitution process, while eliminating time consuming manual interventions, and reduces counterparty risk while increasing auditability.
https://www.broadridge.com/press-release/2017/broadridge-successfully-completes-pilot-of-blockchain-based-bilateral-repo-solution
18 January 2017 - "Liquidity Alliance" builds blockchain solution for cross-border collateral transfer”
Four members of the "Liquidity Alliance" (LA), an international group of central securities depositories (CSDs), are cooperating with Deutsche Börse to launch an initiative leveraging blockchain technology to ease cross-border mobilisation of security collateral. With the planned solution, The Canadian Depository for Securities Limited (CDS), Clearstream (Luxembourg), Strate (South Africa) and VPS (Norway) want to overcome existing hurdles when moving collateral across various jurisdictions, making the transfer faster and more efficient. […]
Being jointly provided by regulated market infrastructures, the Distributed Ledger Technology (DLT) based "LA Ledger" prototype will enable a centralised, faster and more efficient allocation of fragmented security positions to cover financial obligations of market participants in multiple jurisdictions. The decentralised character of DLT (blockchain) allows for direct interaction between participants giving it the potential to simplify complex processes.
http://www.clearstream.com/clearstream-en/newsroom/170118/86346
Contacts:
Gabriel Callsen
Senior Director, FinTech and Digitalisation; Secretary to the ICMA FinTech Advisory Committee (FinAC)
Direct line: +44 20 7213 0334
4 December 2024: Eurosystem completes tests using DLT for central bank money settlement
The Eurosystem has successfully concluded a series of tests employing distributed ledger technology (DLT) for wholesale settlement in central bank money. Between May and November 2024, the Eurosystem processed over 200 transactions and a total value of €1.59 billion. In total, 64 participants comprising central banks, financial market participants and DLT operators completed over 40 trials and experiments. Trials included actual settlement in central bank money, while experiments were tests with mock settlement. The full list of use cases tested is available on the ECB’s website.
The Eurosystem will draw lessons from the exploratory work and further analyse the opportunities and challenges of DLT for financial markets. This will include considering how to facilitate the provision of central bank money settlement for wholesale transactions of assets on DLT platforms. In January 2025, participants involved in the exploratory work will be invited to discuss lessons learned from the trials and experiments. The outcome of the analysis will inform the Eurosystem’s decision on its next steps.
https://www.ecb.europa.eu/press/intro/news/html/ecb.mipnews241204.en.html
4 November 2024: Monetary Authority of Singapore (MAS) publishes the Guardian Fixed Income Framework (GFIF)
The MAS published the Guardian Fixed Income Framework (GFIF), that provides an industry guide to implementing tokenisation in Debt Capital Markets. The framework integrates ICMA Capital Market Association’s Bond Data Taxonomy, Capital Markets and Technology Association’s Token Standards, and the Global Financial Markets Association’s Design Principles for Tokenised Securities. The report provides an overview of the application of tokenisation in the fixed income market, including differences with traditional models and benefits in each stage of the fixed income lifecycle, industry standards for different types of tokenisation and new interaction models allowing commercial scale, design considerations and best practices for implementation including data taxonomy, risk disclosures and governance models, and provides practical examples of the implementation of standards with commercial use cases, guided by policy considerations and frameworks. The publication can be found here.
27 June 2024 - Monetary Authority of Singapore Expands Industry Collaboration on Project Guardian to Scale Asset Tokenisation, with ICMA participation
The MAS has announced the expansion of initiatives to scale asset tokenisation for financial services, building on Project Guardian’s pilot of promising asset tokenisation use cases. Over the past two years, MAS has worked with 24 financial institutions to pilot promising asset tokenisation use cases under Project Guardian. These financial institutions include asset managers, market operators, custodians, credit rating agencies and commercial banks. To promote greater traction in these use cases, MAS is pleased to welcome the Global Financial Markets Association (GFMA), International Capital Market Association (ICMA) and the International Swaps and Derivatives Association (ISDA) as the first global industry associations to join Project Guardian’s industry group.
ICMA will collaborate on the Fixed Income workstream to develop protocols and data specifications building on ICMA’s Bond Data Taxonomy, and consider the types of risk factors and disclosures required in a tokenised bond offering document. Workstream members will also partner GFMA to develop standard clauses for implementing smart contracts of fixed income products.
12 March 2024 - The Canton Network Completes Blockchain Pilot for Tokenized Real World Assets
Digital Asset and leading market participants completed the Canton Network pilot including 15 asset managers, 13 banks, four custodians, three exchanges, and one financial market infrastructure provider. It is a first-of-its-kind program demonstrating the interoperability of twenty-two independent distributed ledger applications (dApps) in the capital markets domain. The successful execution of over 350 simulated transactions proved how a network of interoperable applications can seamlessly connect to enable secure, atomic transactions across multiple parts of the capital markets value chain. It also demonstrated the potential benefits of using such a network to reduce counterparty and settlement risk, optimize capital, and enable intraday margin cycles.
The pilot program provided participants with distributed ledger applications for asset tokenization, fund registry, digital cash, repo, securities lending, and margin management transactions – all with the ability to interoperate via the Canton Network TestNet. Their simulated transactions demonstrated that real-time settlement and immediate reconciliation across counterparty systems could be achieved while adhering to the regulatory asset control, security, and data privacy requirements to move assets safely.
https://www.canton.network/pilot-press-release
14 February 2024 - Citi announces that it successfully completed a proof of concept on tokenization of private funds along with Wellington Management and WisdomTree
The proof of concept, which was conducted on the Avalanche Spruce institutional test Subnet, found that smart-contract capabilities could deliver new functionality and operational efficiencies, which are currently unavailable with traditional assets. These new functionalities could enable buy- and sell-side institutions to engage with distributed ledger infrastructure in a low-risk, low barrier-to-entry manner that is consistent with regulations. The proof of concept tested the tokenization of a Wellington issued private equity fund by bringing it onto a distributed ledger technology (DLT) network, and ABN AMRO simulated the role of a traditional investor. The underlying fund distribution rules were encoded into the smart contract and embedded in the token transferred to hypothetical WisdomTree clients. The proof of concept demonstrated how smart contracts could be used to enable greater automation and potentially create an enhanced compliance and control environment for issuers, distributors, and investors.
As part of the experiment, Citi also evaluated multiple scenarios of transfers using smart contracts that relied on simulated identity credentials issued by WisdomTree and using a private fund token as collateral in an automated lending contract with DTCC Digital Assets (formerly Securrency). By evaluating relevant technical, legal and operational frameworks needed to bring traditional assets on to a digital platform, Citi explored how to support clients issuing and accessing tokenized private assets in a controlled and scalable manner, while ensuring interoperability with the traditional ecosystem.
24 January 2024 - R3 launches new Corda-based product suite, R3 Digital Markets
The new suite of end-to-end digital solutions helps firms to adopt and drive value from digital assets and digital currencies today, whilst preparing for the future of regulated markets, from initial exploration to full scale production. R3 Digital Markets, powered by R3’s Corda, the regulatory compliant tokenization platform, is a new solution built to connect financial markets. It is designed to progress markets by driving the adoption of best-in-class solutions, industry standards, enabling efficiency, cost reductions, and the safe integration of DLT into core business operations.
The R3 Digital Markets product suite includes: (i) R3 Digital Currency: offering comprehensive management of the full lifecycle of digital currencies, including CBDCs and tokenized deposits, facilitating seamless interaction across networks and core banking systems for 24/7/365 settlement. (ii) R3 Digital Assets: enables full lifecycle management tokenization solutions and digital asset exchanges to be built quickly and robustly for the issuance, listing, trading, management and custody of existing and new assets, according to the business need. (iii) R3 Digital Connect: enables the seamless integration of classic existing systems and all DLT networks, facilitating interoperability and integration in financial markets. (iv) R3 Digital Lab: a cloud-based collaborative lab equipped to handle custom use cases in the path to production, providing support and education to help businesses launch DLT projects without the need for a complex infrastructure.
https://r3.com/press-media/r3-launches-digital-markets-and-appoints-kate-karimson-as-cco/
11 January 2024 - Broadridge launches GenAI-Powered OpsGPT to transform and optimize trading in a T+1 environment
Powered by Generative AI (GenAI) and Large Language Model (LLM) technology, OpsGPT uses transactions, settlements and positions data to provide clients real-time visibility for faster fails resolution, researching next best actions and prioritizing key risk items in a single, easy-to-use interface. The new application has been designed with a strong focus on responsible AI practices, addressing the unique needs and challenges faced by the industry.
OpsGPT is trained on curated and harmonized data from Broadridge’s global multi-asset post trade systems which power the clearance and settlement of $10 trillion in trades daily. Moreover, Broadridge’s post trade platforms are underpinned by a common data ontology and high standards of privacy and confidentiality in handling client data. This GenAI-powered application is integrated with Broadridge’s existing global, multi-asset class post trade solutions, allowing seamless use for clients globally. The AI platform provides the flexibility to choose a model based on specific use case needs, as well as both functional and non-functional requirements. The platform also provides a consistent and scalable API interface that makes it easy to switch between different models based on client needs and risk governance processes.
https://www.broadridge.com/press-release/2024/broadridge-launches-genai-powered-opsgpt
10 January 2024 - SETL launches its LedgerSwarm RLN test network, Tranquility
SETL, part of the Colendi Group, announced the launch of a standing test network for the RLN based upon its LedgerSwarm software. As a concept, the Regulated Liability Network (RLN), explores the technical, legal and business characteristics necessary to provide on-chain, 24*7 programmable, final settlement in sovereign currencies, consisting of the liabilities of both public and private regulated financial institutions.
https://setl.io/setl-launches-it-ledgerswarm-rln-test-network-tranquility/
9 January 2024 - Delta Capita and Montis announce expanded commercial partnership and CSD technology delivery
Montis announced the delivery of the first phase of the Montis digitally-native Central Securities Depositary (CSD) system built on Delta Capita’s MACH Distributed Ledger Technology (DLT) platform. MACH is a hybrid technology platform straddling existing ISO MT and MX messaging for securities, cash, and corporate actions, as well as providing a proprietary blockchain core interoperable with other blockchains. Additionally, the technology covers primary issuance and allocation, secondary trading on trading venues, HSM for encrypted networks, asset control and liquidity management and is deployed in AWS cloud across two Availability Zones.
Montis is using Delta Capita’s MACH technology to revolutionise the CSD landscape and received the institutional grade, production ready systems in advance of its full regulatory authorisation, expected early in 2024. The Montis CSD will be blockchain agnostic, supporting Ethereum, Algorand and Hedera as part of phase one. Delta Capita and Montis have reached agreement in principle to expand their commercial partnership to target four additional market infrastructure use cases: (i) Settlement optimisation in Eurosystem markets. (ii) European listed warrants. (iii) Delivery versus Payment using deposit tokens. (iv) Delivery versus Payment using wholesale CBDC.
21 December 2023 - A&O launches SaaS partnership with Microsoft and Harvey
The tool – ContractMatrix – runs on Microsoft Azure providing a robust, flexible and secure platform, allowing A&O to scale the product as SaaS (software as a service) for client and wider market use. ContractMatrix can be deployed as either a web-based application or as a Word Add-In, and will ultimately be available on Microsoft AppSource and the Microsoft Azure Marketplace. ContractMatrix is a contract negotiation tool that uses AI and other techniques to free lawyers from processing and allows them to focus on strategic questions. In some cases it saves around seven hours when negotiating a contract. Expert human decision-making, and judgement, is at its heart.
The tool uses both Harvey and Microsoft Azure OpenAI Service products. A&O will tune client-specific models using a variety of methods depending on client needs. It is designed to reduce hallucinations by grounding AI output in high quality ‘benches’ of legal knowledge – for example, banks of gold standard precedents or similar. Over 1,000 A&O lawyers are already using the tool internally. Many of these lawyers have been heavily involved in testing, refining, and developing the tool ahead of its launch. Five large clients have agreed terms for a January launch.
14 December 2023 - Fnality commences initial phase of Sterling payment operations in a world-first for both wholesale finance and digital asset markets
The initiation of the Sterling Fnality Payment System (£FnPS) brings together the safety and institutional quality of central bank funds in a systemic wholesale payment system with the innovative functionality and resilience of blockchain technology. Lloyds Banking Group, Banco Santander and UBS were initial participants in the £FnPS. The inaugural live payments in this first phase of the new digital FMI and regulated payment system have taken place leveraging an Omnibus Account held by £FnPS in the Bank of England RTGS service. £FnPS is connected to CHAPS to prove its provision of payments services in a live environment and joins the select group of payment systems that form the UK’s recognised payment infrastructure. During this initial phase, the BoE will continue to assess £FnPS operations against regulatory expectations as they scale up to commercial operations.
£FnPS evidences the first foundations of a broader multi-jurisdictional vision; one that enables a seamless global liquidity management ecosystem by empowering new digital payment models for payment (P), payment versus payment (PvP), and delivery versus payment (DvP) transactions in both wholesale financial markets and emerging tokenised asset markets. The initial phase, focused on ensuring system resilience and functionality in a live environment, with limits set by the Bank of England. Scaling operations will be subject to the £FnPS meeting the Bank of England’s operational and supervisory expectations for the next managed phase. This will pave the way for establishing £FnPSs in other core currencies including USD and EUR, onboarding more participant banks, and rolling-out a range of value-adding functionalities including conditional payments, digital securities settlement, intraday repos, intraday FX swaps, and more.
2 November 2023 - The Swiss National Bank (SNB) and SIX Digital Exchange (SDX) collaborate to pilot wholesale CBDC issuance in Switzerland
The SNB announced that in collaboration with six commercial banks, on 1 December 2023 it will start a pilot project with wholesale central bank digital currency (wCBDC) for financial institutions on the regulated platform of SDX. With this pilot, called Helvetia Phase III, the SNB will for the first time issue real wCBDC in Swiss francs on a financial market infrastructure based on distributed ledger technology (DLT). The SNB is thus moving its work from test environments into production and is making wholesale CBDC available for the settlement of real bond transactions. The banks involved will carry out the transactions on the DLT platform as intermediaries for issuers and investors. In addition to the SDX platform, the pilot uses the infrastructure of Swiss Interbank Clearing SIC, which is operated by SIX and SIX SIS, the national Central Securities Depository (CSD) of the Swiss financial market and an International Central Securities Depository (ICSD). The pilot will run from December 2023 to June 2024.
https://www.snb.ch/en/publications/communication/press-releases/2023/pre_20231102
10 October 2023 - Quant launches central bank-grade key management solution for blockchain transactions
Overledger Authorise solves the problem of how banks and institutions can manage and integrate digital asset and blockchain private keys with their existing enterprise key management systems, enabling end-to-end authorisation of transactions seamlessly across existing systems and blockchains. Authorise has recently been stress-tested and proven to work in Project Rosalind, a flagship central bank digital currency experiment led by the Bank of England and Bank for International Settlements with banks, institutions, and industry participants. We’re now making the technology more widely available.
In blockchain, private keys in the form of alphanumeric codes are used to authorise and validate transactions, rendering them irreplaceable for accessing funds stored on a blockchain. Banks traditionally use key management systems that are unsuitable for blockchain, and connecting these systems to blockchain would be burdensome. Authorise addresses this issue by integrating with existing enterprise key management systems and seamlessly managing the signing of blockchain transactions and key generation. When a business application or workflow initiates or signs a transaction, Authorise coordinates the necessary authentication, authorisation and verifications with existing key management systems to securely deliver the transaction to the destination blockchain.
1 October 2023 - Baton Systems launches an automated settlement orchestration platform
The solution, Core-Payments, leverages Baton’s DLT workflows to automatically track and reconcile inbound cash settlements, and to orchestrate the release of outbound cash payments on the basis of configurable rules and real-time data. Core-Payments reduces the need for manual intervention across key reconciliation and control processes, including netting and pre-settlement affirmation, accelerating the completion of key functions and reducing operational costs whilst increasing control and visibility as well as permitting users to reconcile inbound and outbound payments in real-time.
In terms of the technology supporting Core-Payments, the platform is designed to be deployed in a modular fashion, providing users with a flexible set of user interfaces across a range of modules including Visualisation, Netting/Pre-Settlement Affirmation, Controlled Settlement, and Analytics. Additionally, all data inflows and outputs are supported by a range of APIs and integration protocols, allowing firms to digitally transform their approach to payments and settlement without requiring their counterparties to adopt new technology.
https://batonsystems.com/baton-systems-launches-automated-settlement-orchestration-platform/
13 September 2023 - Swift advances CBDC innovation as interlinking solution begins beta testing
Swift committed to developing a beta version of its CBDC connector solution after a first iteration of sandbox testing. The beta solution has taken its next step, with three central banks and monetary authorities, including the Hong Kong Monetary Authority (HKMA) and the National Bank of Kazakhstan, integrating the solution with their own infrastructure for direct testing.
Swift has also initiated a second phase of sandbox testing, in which commercial banks, central banks and financial market infrastructures are exploring additional use cases, including trigger-based payments for digital trade platforms, foreign exchange models, delivery vs payment and liquidity saving mechanisms. The Reserve Bank of Australia, Deutsche Bundesbank, HKMA, Bank of Thailand and CLS are among the enlarged group of more than 30 leading institutions in this second phase. Eighteen central and commercial banks took part in the first phase of the sandbox.
31 August 2023 - Swift announces the results of its interoperability experiments aimed at overcoming fragmentation in tokenised assets
In their latest experiments, Swift demonstrated that their infrastructure could provide a single point of access to multiple networks using existing, secure infrastructure. Reducing operational challenges and the investment required for institutions to support the development of tokenised assets. These experiments are part of a wider strategy to ensure secure, global interoperability as new technologies and platforms emerge. They build on work over the past few years to show how Swift’s infrastructure could support the financial community in interconnecting Central Bank Digital Currencies (CBDCs) and other digital assets with new and existing payments systems.
The experiments looked at the design and technical development of a solution and considerations around data privacy and governance, operational risk, and legal liability. Transfers of simulated tokenised assets took place – between two wallets on the same public Distributed Ledger Technology network; between two wallets on different public blockchains; and between a public and private blockchain network. The exercise advanced shared understanding around the technical and business requirements for interacting with business and public blockchains. It also explored the value of a blockchain interoperability protocol for securely transferring data between existing systems and a potentially unlimited number of blockchains. Swift anticipates that the most concrete use cases for tokenised asset adoption in the near term, will be in the secondary trading of non-listed assets and private markets.
15 June 2023 – ADB publishes report on Project Tridecagon: DLT PoC for settling cross-border DVP securities transactions
Project Tridecagon proved that the deployment of DLT/BC solutions for the settlement of cross- border securities transactions is possible, particularly in a well-governed and functionally well-defined environment. The POC result shows that connectivity between different BCs can be ensured, natively or with the aid of existing tools and emerging applications. Project Tridecagon showed in principle that DLT/BC can play a role in the post-trade arena, process complex transactions to a range of predefined conditions, and observe such conditions even among different BC instances. A full application of the possibilities of DLT/BC may also depend on necessary changes to legal and regulatory prescriptions, including the ability to (i) tokenize cash and securities at the depository level, (ii) have these tokens be—at the very least—accessible across jurisdictions, and (iii) use DLT/BC as the legal ledger of ownership for investors.
https://www.adb.org/publications/market-infrastructures-asean3-project-tridecagon
https://www.fujitsu.com/global/about/research/article/202306-connectionchain-casestudy-adb.htm
14 June 2023 – R3 announces the next generation of its flagship platform Corda
The updated version of R3 Corda has been designed for global financial market infrastructure providers and central banks to enable applications to interoperate seamlessly and securely across other open enterprise DLT networks. R3, in partnership with Adhara, also launched a Hyperledger Lab – Harmonia – to accelerate the development of interoperability protocols for regulated financial institutions. Harmonia addresses the constraints and requirements of regulated financial networks to achieve true atomic settlement across blockchain networks.
The underlying principles guiding the development of the next generation of Corda includes features informed by R3’s in-production customers, including scalability, high availability, enhanced privacy and security, and developer-friendly tools. It’s also distributed as a single open-source codebase to foster developer contributions and reduce total cost of ownership.
6 June 2023 - Swift explores blockchain interoperability to remove friction from tokenised asset settlement
Recognizing the complexity of managing investments on diverse and non-interoperable blockchain networks, Swift aims to remove friction and overhead by collaborating with major financial institutions and market infrastructures. Partners such as ANZ, BNP Paribas, BNY Mellon, Citi, Euroclear, and others will test the use of their existing Swift infrastructure to facilitate the transfer of tokenized value across various public and private blockchain networks. Chainlink, a leading Web3 services platform, will provide connectivity for these experiments. The initiative not only aims to enhance scalability in the market but also addresses operational and regulatory challenges in blockchain-based financial operations. This builds upon Swift's successful trials in 2022, emphasizing their commitment to improving efficiency and reducing friction in international transactions.
The first use case will involve the transfer of tokenised assets between two wallets on the same public blockchain network (Ethereum Sepolia testnet). The second involves the transfer of tokenised assets from a public blockchain (Ethereum) to a permissioned blockchain. And a third use case will test the transfer of tokenised assets from Ethereum to another public blockchain. Chainlink will be used as an enterprise abstraction layer to securely connect the Swift network to the Ethereum Sepolia network, while Chainlink’s Cross-Chain Interoperability Protocol (CCIP) will enable complete interoperability between the source and destination blockchains.
26 May 2023 – R3, in collaboration with ABI Lab, ABI (Italian Banking Association), and NTT Data Italia, were selected by the Bank of Italy and its Innovation Hub for ‘Project Leonidas’
As one of the fourteen projects chosen by the Bank of Italy, the initiative is aimed at exploring, designing , and developing wholesale CBDC capabilities within the Spunta Banca DLT solution over a 6-month period, the project commenced shortly after the project selection announcement on 17 May 2023. Spunta Banca DLT has seen significant volumes; processing 94 nodes and over 600 million technical transactions in three years. R3 will utilise its Corda platform, working closely with ABI Lab and ABI to combine expertise for a robust CBDC solution. NTT Data Italia joins as a key partner, leveraging its integration capabilities to enable seamless collaboration between the CBDC ecosystem and existing financial infrastructure, aligning with Italy’s financial sector requirements.
18 May 2023 - Government bond tokenization platform and wCBDC project announced within Bank of Italy FinTech Hub
A government bond tokenization platform and wholesale CBDC for interbank transactions were among 14 projects the Bank of Italy announced as part of its Milano Hub testing on the application of distributed ledger technology (DLT).
The proposed tokenisation platform would be built on the Algorand blockchain with the management of the issue, placement on the primary market and trading on the secondary market, regulated by Smart Contracts executed in a secure, scalable and efficient on the Algorand Virtual Machine. The platform manages privacy and security by integrating KYC and AML functions, portfolio management and asset management, for the complete management of the asset life cycle. Payments of Delivery-vs-Payment (DvP) operations on the platform are settled in real time through a proposed integration between the Algorand protocol and the pan-European platform TIPS (TARGET Instant Payment Settlement).
The proposed wholesale CBDC project intends to verify obtainable benefits to carry out interbank transactions. The objective of the initiative is therefore to develop the concept of wCBDC and test it in the context of a DLT context that is already mature and in production, such as Spunta Banca DLT, to carry out exchanges of value at an interbank level.
18 May 2023 – The New York Fed and Monetary Authority of Singapore publishes the results of joint wholesale cross-border payments research study
The Federal Reserve Bank of New York’s New York Innovation Center (NYIC) and the Monetary Authority of Singapore (MAS) published a research report detailing the results of the joint Project Cedar Phase II x Ubin+ (Cedar x Ubin+) experiment. The Cedar x Ubin+ experiment examined whether distributed ledger technology (DLT) could be used to improve the efficiency of cross-border wholesale payments and settlements involving multiple currencies. The Cedar x Ubin+ experiment demonstrated that DLT could support enhancements to cross-border multi-currency payments and settlements. The findings addressed three key pain points related to network interoperability and autonomy, settlement, and speed:
Atomic Settlement: The simulated payments were settled atomically, meaning transactions were only settled if all legs in the cross-currency payment chains were executed successfully. This improved the certainty of settlement, addressing existing pain points such as counterparty risks.
Near Real-Time Settlement: Each simulated payment scenario achieved end-to-end settlement in under thirty seconds on average. This enabled participants to be notified of a payment’s success in a matter of seconds.
https://www.newyorkfed.org/newsevents/news/financial-services-and-infrastructure/2023/20230518
20 April 2023 - Societe Generale–Forge launches “CoinVertible” institutional stablecoin
3 March 2023 - RBA research project with industry participants to test CBDC as proposed pilot settlement asset for corporate bonds and HQLA securities trading
The Reserve Bank of Australia is collaborating with the Digital Finance Cooperative Research Centre (DFCRC) on a research project to explore the potential use cases and economic benefits of a CBDC in Australia. The project will involve a limited-scale pilot CBDC that is a real digital claim on the Reserve Bank, with selected industry participants demonstrating potential use cases. According to the DFCRC, the case proposals have been announced, and a range of criteria was considered in selecting the use cases to participate in the pilot, including their potential to provide insights into the possible benefits of a CBDC. The live pilot will take place over the coming months, and a report on the project is expected to be published around the middle of the year.
24 January 2023 - SIX Digital Exchange opens its doors to EURO denominated bonds
SIX Digital Exchange (SDX) received regulatory clearance by FINMA to support the issuance, trading and settlement of bonds denominated in EUR.
Issuers will be able to make use of this service to issue EUR denominated bonds under Swiss law, opening up new possibilities for market participants in the digital asset space. SDX members trading in bonds issued and settled in EUR can now also benefit from atomic trading and settlement via SDX-CSD, the first regulated CSD based on DLT. Members of SDX-CSD will be able to initiate a tokenization and de-tokenization of tEUR (tokenized EUR) through a connection to euroSIC. The process is similar to existing processes for tCHF.
https://www.sdx.com/news/open-to-euro-bonds/
30 November 2022 - DTCC publishes report on digital dollar project and requirements for supporting a US CBDC in securities settlement
The Depository Trust & Clearing Corporation (DTCC) published its latest whitepaper, “Exploring Post-Trade Security Settlement with a U.S. Central Bank Digital Currency,” in collaboration with The Digital Dollar Project (DDP) and support from Accenture. The paper outlines key findings from the pilot (formerly known as Project Lithium), the first private sector initiative to explore how tokenized securities and a wholesale Central Bank Digital Currency (CBDC) could operate within the U.S. settlement infrastructure leveraging distributed ledger technology (DLT). The pilot included participation from leading market participant firms including Bank of America, Citi, Nomura, Northern Trust, State Street, Virtu Financial and Wells Fargo.
DTCC’s pilot leveraged DLT, with the goal of demonstrating success in settling tokenized securities on DTCC’s Digital Settlement Network prototype against tokenized dollars on a simulated CBDC network provided by Accenture. Pilot participants provided feedback on the DDP and DTCC pilot through a series of workshops. The design included an architecture that connected two distinct asset networks to enable secure, resilient, and efficient security settlement leveraging CBDCs. The pilot also assessed network governance, creating mechanisms for a network administrator to resolve transactional issues while otherwise remaining in observation mode, ensuring that assets were settled on both networks, minimizing communication dependencies between parties, and eliminating counterparty risk at the time of settlement.
15 November 2022 - New York Innovation Center project to explore theoretical payments system to facilitate and settle digital asset transactions
https://www.newyorkfed.org/aboutthefed/nyic/facilitating-wholesale-digital-asset-settlement
11 November 2022 - New York Fed and MAS collaboration to explore potential enhancements to cross-border payments using wholesale CBDCs
https://www.newyorkfed.org/newsevents/news/financial-services-and-infrastructure/2022/20221110
24 October 2022 - BIS, HKMA and UN prototype using blockchain, smart contracts and IoT to demonstrate feasibility of tokenised green bonds with MOIs
Project Genesis 2.0 is a collaboration between the BIS Innovation Hub's Hong Kong Centre, the Hong Kong Monetary Authority and the UN Climate Change Global Innovation Hub, with two consortia. Through the use of blockchain, smart contracts and the internet of things (IoT), Genesis 2.0 delivered two prototypes that demonstrate the technical feasibility of tokenised green bonds with mitigation outcome interests (MOIs) attached. These are de facto verified carbon credits recognised by either international, national or other verification mechanisms in line with the Paris Agreement. The MOIs are digitally tracked and automatically delivered to investors, through the use of distributed ledger technology and smart contracts, combined with IoT devices tracking the carbon credits at source. A legal term sheet for the bonds was contributed by King & Wood Mallesons.
The first prototype, developed by Goldman Sachs, Allinfra and Digital Asset, showcased a simulated solution for an end-to-end digital flow for institutional green finance. The straight through process via a distributed ledger technology platform was able to digitally track, deliver and transfer MOIs, in addition to tokenising the issuance of the green bond itself. It was able to achieve smart contract-based delivery of bonds and MOIs, and provided source data transparency enabled by IoT technology. The second prototype, developed by InterOpera in collaboration with Krungthai Bank, Samwoo and Sungshin Cement, was built on an interoperable host chain designed as part of a wider ecosystem. With a combination of blockchain, smart contract and application programming interface (API) technologies, it also digitally tracked, delivered and transferred MOIs throughout the full green bond life cycle.
https://www.bis.org/publ/othp58.htm
11 October 2022 - Banque de France participates in a new wholesale central bank digital currency experiment with SWIFT
5 October 2022 - SWIFT completes two experiments on interlinking CBDCs and tokenised asset platforms
12 April 2022 - DTCC’s Project Lithium to test Digital US Currency in clearing and settlement
As the U.S. government advances its analysis into the risks and benefits of a Central Bank Digital Currency (CBDC), The Depository Trust & Clearing Corporation (DTCC) announced the development of the first prototype to explore how a CBDC might operate in the U.S clearing and settlement infrastructure leveraging distributed ledger technology (DLT). The prototype, known as Project Lithium, will measure the benefits of a CBDC and inform the future design of the firm’s clearing and settlement offerings. It will also explore how a CBDC could enable atomic settlement, a conditional settlement that occurs if delivery and payment are both received at the same time.
As the markets evolve and become more digitalized, the use of printed U.S. currency continues to decline while the adoption of tokenized securities grows at a rapid pace. Unlike private cryptocurrencies such as bitcoin, a CBDC would be issued and backed by the Federal Reserve, just like U.S. paper dollars and coins. With this prototype, DTCC, in partnership with The Digital Dollar Project (DDP), aims to demonstrate the direct, bilateral settlement of cash tokens between participants in real-time delivery-versus-payment (DVP) settlement. The pilot will also identify how it can leverage DTCC’s robust clearing and settlement capabilities to fully realize the potential benefits of a CBDC, including (i) Reduced counterparty risk and trapped liquidity, (ii) Increased capital efficiency, (iii) A more efficient, automated workflow (iv) The guarantee that cash and securities are delivered, and (v) Added transparency to regulators.
6 April 2022 - SARB completes DLT payments and debenture tokenisation proof-of concept
The South African Reserve Bank (SARB), in collaboration with the Intergovernmental Fintech Working Group (IFWG), announced the launched the Project Khokha 2 (PK2) report, following the conclusion of the technical proof-of-concept (PoC). PK2 was launched in February 2021 as an initiative under the IFWG’s Innovation Accelerator and was driven by the SARB’s Fintech Unit. PK2 aimed to issue, clear and settle SARB debentures (a debt security) on DLT using two settlement options: a wholesale central bank digital currency (wCBDC) as a form of central bank money, and a wholesale settlement token (wToken) as a form of private money issued by commercial banks. Two DLT networks were created for the debenture token market. The one network, Khokha Hub, served as a token trading platform and enabled the issuance of, and trade in, debenture tokens. The other network, wCBDC Zone, enabled the issuance of wCBDC on a private platform owned and operated by the SARB. Industry participants who participated in the technical PoC were Absa, FirstRand, JSE Limited, Nedbank and Standard Bank as well as technical and support service providers.
31 January 2022 - LuxSE admits first financial instrument registered on DLT on LuxSE SOL
The Luxembourg Stock Exchange (LuxSE) and Societe Generale marked the admission of the very first financial instruments registered on a public Distributed Ledger Technology (DLT) on LuxSE’s Securities Official List (LuxSE SOL). The three series of security tokens admitted on LuxSE SOL are digital covered bonds (OFH Tokens) and structured products that have been issued and deployed by Societe Generale’s digital assets arm, Societe Generale - FORGE (SG - FORGE), natively on the Ethereum and Tezos public blockchains respectively. They are characterized as financial instruments and debt securities under French law and are compliant with the CAST open-source interoperability and securitization framework.
The admission takes place within a larger context marked by the acceleration of market digitalisation using blockchain technology, notably through the imminent adoption of the EU Pilot Regime, which is expected to enter into force in 2022, and which will permit the processing of security tokens through market infrastructures in compatibility with applicable EU regulations within a transitional period. Native security tokens issued on DLT allow for a fully digital issuance process and lifecycle. Due to their innovative characteristics, native security tokens have the potential to significantly improve efficiency and transparency in financial markets and make transactions safer and more resilient – all while offering benefits similar to those of financial instruments issued in a conventional way. To clarify the eligibility criteria and guide issuers of security tokens through the admission process, LuxSE published Guidelines for the registration of DLT financial instruments onto SOL. To be considered for admission on LuxSE SOL, security tokens will need to respect these guidelines as well as the LuxSE SOL Rulebook.
https://www.bourse.lu/pr-luxse-admits-security-tokens-by-societe-generale
https://www.societegenerale.com/en/news/press-release/luxse-admits-security-tokens-issued-societe-generale
26 January 2022 - ADB to develop a prototype for cross-border securities transaction system using blockchain
The Asian Development Bank (ADB) has launched a project to make cross-border securities transactions in Asia and the Pacific more efficient and secure through the use of blockchain technology. Working with leading blockchain companies, ADB will seek to develop ways to directly connect central banks and securities depositories in the ASEAN+3 region within a blockchain network. The region consists of the Association of Southeast Asian Nations plus Japan, the People’s Republic of China, and the Republic of Korea.
3 November 2021 - Goldman Sachs Taps Digital Asset to Build Open Platform for Tokenized Assets
Digital Asset, a leading software and services provider helping enterprises build economic value through interconnected networks, announced that Goldman Sachs will use Daml, Digital Asset’s core technology, to develop its end-to-end tokenized asset infrastructure supporting the end-to-end digital life cycle across multiple asset classes on permissioned and public blockchains.
Daml is a platform for building multi-party applications that run seamlessly across new technologies and legacy infrastructure. It is the first system to fulfill the key requirements of a network-of-networks for global commerce. Daml solutions have been selected for production rollout at several of the world’s top exchanges, as well as powering the daily processing of around $35B in repo transactions.
https://hub.digitalasset.com/hubfs/DA%20Goldman%20Sachs%20Press%20Release%2011.1_V8.docx.pdf
9 November 2021 - DTCC to Launch Platform to Digitalize and Modernize Private Markets
The Depository Trust & Clearing Corporation (DTCC) announced a new platform to streamline the issuance, transfer and servicing of private market securities. As described in a new industry report, “Digital Securities Management: Bringing Private Markets Infrastructure Into the 21st Century”, DTCC’s new Digital Securities Management (DSM) platform will, subject to regulatory approval, for the first time, provide an industry-wide solution that offers common market infrastructure and standards across private markets. The platform represents the next major milestone in DTCC’s efforts to bring automation, standardization and efficiency to the private markets, building upon its Project Whitney case study.
DSM will offer access to participants through both central and distributed infrastructure, leveraging a cloud-based architecture to enable the book entry recordkeeping of securities as well as support the burgeoning digital asset ecosystem by providing the option to create tokenized representations of a security. From launch, DSM will optimize primary issuance and transform secondary markets, creating new business model and distribution opportunities for participants while facilitating a digital asset ecosystem. Architected to be blockchain agnostic, DSM will initially interface with the Public Ethereum Network, but will incorporate additional public and private blockchain support based on client and market demand. The DSM platform will initially support pre-IPO equity securities, and will expand into other markets, positioning it to become the platform of choice for funds, debt, real estate, loans and other private instruments that are underserved today from a market infrastructure perspective. DTCC is currently in the production build phase of the DSM platform and, subject to final regulatory approval, is expected to launch the service in early 2022.
https://www.dtcc.com/news/2021/november/09/dtcc-to-launch-platform-to-digitalize-and-modernize-private-markets
6 October 2021 - Deutsche Börse launches next-generation digital post-trade platform
Global market infrastructure provider Deutsche Börse plans to launch a regulatory compliant, fully digital post-trade platform called D7, anchored in the recently introduced German digital securities law framework. The new cloud-backed and DLT-ready D7 platform will enable market participants to digitise their financial products with continuing access to both existing central and distributed infrastructures and markets. The D7 platform paves way for same-day-issuance and paperless, automated straight-through processing for the entire value chain of issuance, custody, settlement, payment and asset servicing for digital securities. As of mid-2022, over 80 per cent of German securities will be digitisable via D7, fostering digitisation of the German and European financial markets. D7 will complement the Group’s established “7 Market Technology” infrastructure portfolio.
For this transformational step forward in realising a digital future for securities markets, Deutsche Börse has joined forces with several leading global and German financial institutions to create a market-ready digital infrastructure, including BNP Paribas, Citi, DekaBank, Deutsche Bank, dwpbank, DZ Bank, Goldman Sachs, Raiffeisen Bank International and Vontobel. The D7 platform is being developed in collaboration with long-term strategic technology partners Digital Asset and Microsoft, as well as R3 and VMware. The complete functionality of the D7 platform will be rolled out in phases over the next few years.
https://www.deutsche-boerse.com/dbg-en/media/press-releases/Deutsche-B-rse-launches-next-generation-digital-post-trade-platform--2800582
15 September 2021 - DTCC’S Project ION Platform Moves to Development Phase
The Depository Trust & Clearing Corporation (DTCC) announced that its Project Ion initiative, an alternative settlement platform that leverages distributed ledger technology (DLT), will move into a development phase following a successful prototype pilot with leading market participant firms. With six months of testing of the “proof of concept” now complete, DTCC has the quantitative data and qualitative feedback to build out a production-ready workflow and a roadmap for, subject to regulatory approval, future full industry integration and adoption. Specifically modelled around a netted T+0 settlement cycle — but capable of supporting T+2, T+1, T+0 or extended settlement cycles — the Project Ion platform is designed to: (i) Provide a clearance and settlement option for the industry leveraging DTCC’s core benefits of risk management and volume capacity, including netting and the trade guarantee of the CCP. (ii) Support new features, with seamless interoperability between the Project Ion platform and the classic settlement platforms at The Depository Trust Company (DTC). (iii) Ensure adherence to DTCC’s rigorous regulatory standards across resiliency, stability, security, risk, and controls.
As described in a new white paper, “Building the Settlement System of the Future,” the first phase of the Project Ion platform will support bilateral deliver order transactions that will be initiated by pilot participants through client nodes hosted by DTCC. Once launched, the transactions will be processed through the Project Ion platform and then passed to DTC’s existing systems for settlement processing. The Project Ion platform is anticipated to be launched in the first quarter of 2022, and will serve as a parallel book and infrastructure for limited bilateral transactions on DLT, with DTC’s existing systems continuing to remain the authoritative source of transactions. DTCC has planned for early and later adoption of the functionality and technology offered by Project Ion, to ensure the phased roll-out is responsive to clients’ individual development agendas. For clients, this means that while the general industry can move ahead to achieve T+1 accelerated settlement on DTCC’s classic systems, those clients ready to integrate onto the ledger can begin development efforts and start to ready their firms for the future operating model without waiting for full-market adoption.
https://www.dtcc.com/news/2021/september/15/dtccs-project-ion-platform-moves-to-development-phase-following-successful-pilot-with-industry
10 September 2021 - SIX Digital Exchange gets regulatory approval from FINMA
SIX Digital Exchange (SDX) formally received the FINMA go-ahead to operate a stock exchange and a central securities depository for digital assets in Switzerland. This authorization enables SDX to go live with a fully regulated, integrated trading, settlement, and custody infrastructure based on distributed ledger technology for digital securities. With these licenses, SDX can now offer the highest Swiss standards of oversight and regulation. SIX Digital Exchange set out to build a fully integrated trading, settlement, and custody infrastructure based on distributed ledger technology for digital assets in 2018. This milestone has now been reached with the approval of both licenses and paves the way for the next stage in the development of a future ecosystem.
Over the coming months and years, SIX Digital Exchange will continue to invest in building out the digital financial ecosystem to create a global liquidity network for digital assets by engaging in cooperative ventures with partners and accelerating the onboarding of various global and local financial players. As this international customer base expands to include banks, issuers, insurance firms, institutional investors, the members of SDX will create a global exchange network for digital assets, unlocking global liquidity based on Distributed Ledger Technology.
https://www.sdx.com/news/six-digital-exchange-gets-regulatory-approval-finma
See also: FINMA press release (10 September 2021)
13 August 2021 – SEBI announces ‘Security and Covenant Monitoring’ using Distributed Ledger Technology
The Securities and Exchange Board of India (SEBI) released its circular on ‘Security and Covenant Monitoring’ using Distributed Ledger Technology. In order to strengthen the process of security creation, monitoring of security created, monitoring of asset cover and covenants of the non-convertible securities, a working group comprising of officials from SEBI, Depositories, Stock Exchanges and Trustees Association of India (TAI) was constituted by SEBI.
Based on the recommendations of the working group, a platform for ‘Security and Covenant Monitoring System’ (‘system’) hosted by Depositories shall be developed. The system shall be used for recording and monitoring of the security created and monitoring of covenants of non-convertible securities. The system shall inter alia capture the process of creation of security (viz. due diligence, charge creation etc.), continuous monitoring of covenants by Debenture Trustees (as applicable), credit rating of the non-convertible securities by the Credit Rating Agencies (CRAs) etc. Depositories shall create, host, maintain and disseminate the system for security and covenant monitoring using distributed ledger technology. The system shall come into effect from April 01, 2022. However, testing of the system shall start from January 01, 2022 and therefore, Issuers, Debenture Trustees and Credit Rating Agencies etc. are thereby advised to carry out necessary changes, if any, in order to be ready to execute such functions as required for the proposed platform
https://www.sebi.gov.in/legal/circulars/aug-2021/-security-and-covenant-monitoring-using-distributed-ledger-technology_51855.html
22 July 2021 - Central Bank of Colombia, IDB Group and Banco Davivienda pilot bond issuance using blockchain technology
The Central Bank of Colombia announced the launch of a pilot bond issuance, in collaboration with IDB Group and Banco Davivienda, to be negotiated and settled in blockchain technology through the use of smart contracts. The pilot seeks to verify the benefits of this new technology in the life cycle of a security, from issuance to expiration. The benefits include the potential reduction of operational costs, the optimisation of process times, greater efficiencies in the traceability and security of operations, the elimination of information asymmetries and a better management of financial risks, among others.
The Banco de la República will act as an observer node in the blockchain network. Their participation in the technological experiment is carried out in order to understand the process of issuing and trading securities in a decentralized way in blockchain technology in the primary and secondary market, as well as understanding the operational challenges of the project and the regulatory needs. Davivienda and the IDB Group seek that, with the proof of concept, whose duration is estimated at 6 months, a commercial, operational, technological and regulatory framework is created necessary to be able to carry out “real” operations of debt instruments through technology blockchain and the use of smart contracts.
https://www.banrep.gov.co/es/el-banco-republica-participa-lanzamiento-primer-piloto-bono-blockchain-colombia
8 July 2021 - Banque de France and Monetary Authority of Singapore completion of wholesale cross-border payment and settlement experiment using CBDC
The Banque de France (BdF) and the Monetary Authority of Singapore (MAS) announced the successful completion of a wholesale cross-border payment and settlement experiment using central bank digital currency (CBDC). The experiment, supported by J.P. Morgan’s Onyx, simulated cross-border transactions involving multiple CBDCs (m-CBDC) on a common network between Singapore and France. This experiment is one of the last of the Banque de France wholesale experiment program, which will be achieved by fall 2021, and is the first m-CBDC experiment that applied automated market making and liquidity management capabilities to reap cross-border payment and settlement efficiencies.
Cross border payments currently rely on correspondent bank arrangements that are subject to limited transparency on foreign exchange rates, restricted operating hours of payment infrastructures and currency settlement delays due to differences in time zones. To address these challenges, the experiment used a common m-CBDC network, aimed at facilitating cross border payments on a 24 x 7 real time basis. The experiment simulated cross-border and cross-currency transactions for Singapore Dollar (SGD) CBDC and €uro (EUR) CBDC, and was conducted using a permissioned, privacy-enabled blockchain based on Quorum technology. Four key outcomes were achieved: (1) The demonstration of interoperability across different types of cloud infrastructure. Blockchain nodes were set up across private and public cloud infrastructures in both countries. (2) The design of a common m-CBDC network that enabled the two central banks to have visibility on cross border payments, while retaining independent control over the issuance and distribution of their own CBDC. (3) The setup of an experimental m-CBDC network that incorporated automated liquidity pool and market-making service for EUR/SGD currency pairs. The use of smart contracts automatically managed the EUR/SGD currency exchange rate in line with real-time market transactions and demands. The simulation of an experimental m-CBDC network that showed that the number of correspondent banking parties involved in the payment chain for cross-border transactions can be reduced. Consequently, the number of contractual arrangements, the KYC (Know Your Customer) burden as well as the associated costs could be cut down.
https://www.banque-france.fr/en/communique-de-presse/banque-de-france-and-monetary-authority-singapore-break-new-ground-cbdc-experimentation-0
https://www.mas.gov.sg/news/media-releases/2021/monetary-authority-of-singapore-and-banque-de-france-break-new-ground-in-cbdc-experimentation
5 July 2021 - Banque de France conducts experiment on the use of CBDC for issuance and settlement of listed and unlisted securities
On 18 and 25 June 2021, the Banque de France successfully carried out a fifth experiment on central bank digital currency (CBDC) with a consortium of actors driven by LiquidShare as part of the experimental programme launched in March 2020. The experiment involved the simulation on a private blockchain of the issuance and settlement of unlisted securities and of the settlement of listed securities. Settlements of securities were simulated by central bank digital currency issued on the blockchain. The experiment required the development and deployment of smart contracts so that the Banque de France could issue and control the circulation of CBDC tokens while ensuring that each transfer takes place simultaneously with the delivery of the securities. These operations were conducted by a consortium of players gathered at the initiative of LiquidShare, among which Axa Investment Managers, BNP Paribas Securities Services, CACEIS Bank, CIC Market Solutions, Crédit Agricole Titres, Euroclear, Euronext, Kriptown, La Banque Postale, Caisse des Dépôts, ODDO BHF, ODDO BHF AM, OFI AM and Société Générale Securities Services.
This experiment made it possible to test the integration of issuance and settlement activities, including exchanges on the secondary market. It serves the discussions that the Banque de France is conducting on the tokenisation of financial assets; in particular, the new settlement processes tested should contribute to a greater integration of financial markets. The programme's other experiments are ongoing and all the lessons learned will be an important part of the Banque de France's contribution to the Eurosystem's more global reflection on the benefits of CBDC.
https://www.banque-france.fr/en/communique-de-presse/banque-de-france-conducts-successful-experiment-use-central-bank-digital-money-consortium-actors
https://a892f57b-c3c9-47a5-bc2c-d573cc5479db.filesusr.com/ugd/3d346b_0bf935ff843d42b8bcd770eb62b0caad.pdf
25 June 2021 - Banque de France conducts experiment on the use of CBDC to settle issuance of French Government Bond
The Banque de France conducted a successful experiment on the use of central bank digital currency to settle the issuance of a French Government Bond (OAT, Obligation Assimilable du Trésor) by Agence France Trésor with a consortium of actors driven by Euroclear. The Banque de France successfully conducted between 21 and 24 June a Central Bank Digital Currency (CBDC) experiment with a group of economic players driven by Euroclear, as part of the experimental programme launched in March 2020. The experiment consisted in the simulation on a permissioned blockchain of Government bonds’ (OAT) issuance of by Agence France Trésor, followed by several secondary market operations performed on these bonds. Cash settlements were simulated by central bank digital currency issued on the blockchain. From a technological point of view, the experiment required the development and deployment of smart contracts so that the Banque de France could issue and control the circulation of CBDC tokens and ensure that their transfer takes place simultaneously with the delivery of the OAT tokens into the investors' portfolio.
These operations were conducted by a consortium of economic player’s setup at the initiative of Euroclear including Agence France Trésor, BNP Paribas, BNP Paribas Securities Services, Crédit Agricole CIB, HSBC Continental Europe and Société Générale who executed the different test scenarios along experiment days. Banque de France drove Software developments. The programme's other experiments are ongoing until autumn 2021 and all the lessons learned will be an important part of the Banque de France's contribution to the Eurosystem's more global reflection on the benefits of CBDC.
https://www.banque-france.fr/en/communique-de-presse/banque-de-france-conducts-new-central-bank-digital-currency-experiment-0
21 June 2021 - Banque de France conducts new CBDC experiment for settlement of listed securities
On 18 June 2021, Banque de France successfully conducted a Central Bank Digital Currency (CBDC) experiment with SEBA Bank, as part of the experimental program launched in March 2020. The experiment consisted in using the CBDC to simulate the settlement of listed securities and thus trigger their delivery in TARGET2-Securities (T2S), in test environment, thanks to Conditional Securities Delivery (CoSD) existing feature in T2S. From a technological point of view, Banque de France simulated CBDC issuance on public blockchain, by preserving control and confidentiality of transactions, based on the development and deployment of a dedicated smart contract.
All these operations were conducted in collaboration with SEBA Bank, Banque Internationale à Luxembourg and LuxCSD.The programme's other experiments are ongoing until mid-2021 and all the lessons learned will be an important part of the Banque de France's contribution to the Eurosystem's more global reflection on the benefits of CBDC.
https://www.banque-france.fr/en/communique-de-presse/banque-de-france-conducts-new-central-bank-digital-currency-experiment
https://www.seba.swiss/media-and-investors/seba-bank-and-partners-successfully-complete-its-cbdc-experiment-with-banque-de-france
10 June 2021 - Banque de France, Swiss National Bank and Bank for International Settlements Innovation Hub collaborate for experiment in cross-border wholesale CBDC
The Banque de France, the Swiss National Bank and the BIS Innovation Hub today announced that, together with a private sector consortium led by Accenture, they will conduct an experiment using wholesale central bank digital currencies (wholesale CBDC) for cross-border settlement. The private sector consortium includes Credit Suisse, Natixis, R3, SIX Digital Exchange and UBS.
The experiment will explore cross-border settlement with two wholesale CBDC and a French digital financial instrument on a DLT platform. It will involve the exchange of the financial instrument against a euro wholesale CBDC through a delivery versus payment (DvP) settlement mechanism and the exchange of a euro wholesale CBDC against a Swiss franc wholesale CBDC through a payment versus payment (PvP) settlement mechanism. These transactions will be settled between banks domiciled in France and in Switzerland, respectively.
https://www.banque-france.fr/en/communique-de-presse/banque-de-france-swiss-national-bank-and-bank-international-settlements-innovation-hub-collaborate
https://www.snb.ch/en/mmr/reference/pre_20210610/source/pre_20210610.en.pdf
https://www.bis.org/press/p210610a.htm
28 April 2021 - DBS, J.P. Morgan and Temasek to establish platform to transform interbank value movements in a new digital era
Acknowledging that the future of global payments is on the cusp of a fundamental shift, DBS, J.P. Morgan and Temasek announced plans to develop an open industry platform to reimagine and accelerate value movements for payments, trade and foreign exchange settlement in a new digital era, through a newly-established technology company. The company, Partior, aims to disrupt the traditional cross-border payments ‘hub and spoke’ model, that has resulted in common pain points, including multiple validations on payment details by banks, which translate to costly and onerous post transaction exception handling and reconciliation activities. Partior recognises the need for more efficient digital clearing and settlement solutions across the banking industry, and targets to address these challenges through the use of blockchain solutions to enable next generation, programmable value transfer for participating banks and their clients in real-time across a common and open platform.
The Partior platform has also set its sights on developing wholesale payments rails based on digitised commercial bank money to enable “atomic” or instantaneous settlement of payments for various types of financial transactions. Such functionality would help banks overcome challenges presented by the current standard sequential method of processing global payments. The operation of Partior by DBS, J.P. Morgan and Temasek and the completion of development, launch and availability of services on the proposed platform are subject to obtaining any required regulatory consents and approvals. When complete, the platform aims to provide 24/7 infrastructure that will enable financial institutions and developers to co-create applications that support use cases such as FX Payment Versus Payment (PVP), Delivery Versus Payment (DVP) and Peer-to-Peer escrows to complement and value-add to global financial ecosystems. The platform will start with a focus on facilitating flows primarily between Singapore-based banks in both USD and SGD, with the intent to expand service offerings to other markets and in various currencies. Partior’s platform will also be designed to complement ongoing Central Bank Digital Currencies (CBDCs) initiatives and use cases.
https://www.dbs.com/newsroom/DBS_JP_Morgan_and_Temasek_to_establish_platform_to_transform_interbank_value_movements_in_a_new_digital_era
https://www.jpmorgan.com/news/dbs-jpmorgan-and-temasek-to-establish-platform?source=wp_os_li_jpmbc0421#__prclt=2zEMm7ge
https://www.temasek.com.sg/en/news-and-views/news-room/news/2021/dbs-jp-morgan-temasek-establish-platform-to-transform-interbank-value-movement-new-digital-era
24 March 2021 - Deutsche Börse, Deutsche Bundesbank and Germany’s Finance Agency test DLT-based securities settlement in central bank money
Deutsche Börse, Deutsche Bundesbank and Germany’s Finance Agency have developed and successfully tested a settlement interface for electronic securities, working with a range of other market participants. Securities settlement using distributed ledger technology (DLT) is performed with the aid of a “trigger solution” and a transaction coordinator in TARGET2, the Eurosystem’s large-value payment system. In doing so, the participants have demonstrated that it is possible to establish a technological bridge between blockchain technology and conventional payment systems to settle securities in central bank money with no need to create central bank digital currency. During testing, the Federal Government’s Finance Agency issued a ten-year Federal bond (Bund) in the DLT system, with primary and secondary market transactions also being settled using DLT. The transactions carried out during testing are not legally binding.
DLT such as blockchain have been increasingly growing in importance in recent years. The project saw the creation of an interface between conventional payment systems and a DLT-based securities system. Two software modules – a trigger chain from the Bundesbank and a transaction coordinator from Deutsche Börse – connect TARGET2 with a DLT securities system. The securities and central bank money do not change hands until the transfer has been successfully confirmed by all parties. This delivery-versus-payment mode of settlement minimises counterparty risk for both the buyer and the seller. In DLT-based settlement, assets and money are typically tokenised, i.e. represented as digital tokens in the DLT environment. This newly unveiled solution does away with tokenised money. What has been created instead is an interface that connects the DLT platform with conventional payment systems and initiates (“triggers”) payment. As the solution tested in the project can be adopted by a variety of DLT-based settlement systems, it represents a major advance for the further use of DLT in the financial sector and real economy.
The market participants involved in conducting the experiment were Barclays, Citibank, Commerzbank, DZ Bank, Goldman Sachs and Société Générale.
https://www.bundesbank.de/en/press/press-releases/dlt-based-securities-settlement-in-central-bank-money-successfully-tested-861444
https://deutsche-boerse.com/dbg-en/media/press-releases/-DLT-based-securities-settlement-in-central-bank-money-successfully-tested-2590444
19 March 2021 - DBS Bank China, supported by CCDC and SPD Bank, issues tier-2 capital bonds using blockchain technology for bookbuilding purposes
China Central Depository & Clearing Co., Ltd. ("CCDC") and Shanghai Pudong Development Bank (“SPDB”)(the lead underwriter) used blockchain technology for the first time to support DBS Bank (China) to successfully issue RMB 2 billion tier-2 capital bonds. The issuance interest rate is 4.7%, and the raised funds will be used to replenish the issuer’s tier-2 capital. Compared with the traditional method, the use of blockchain technology can reduce the information asymmetry in the issuance process, prevent the risk of data tampering, and realize the traceability of issuance data, so as to improve the efficiency of bond issuance and ensure security.
Based on a comprehensive strategic partnership, CCDC and SPDB continue to cooperate in cutting-edge fields such as fintech and innovation. For this bond issuance, CCDC and SPDB jointly built a consortium blockchain. CCDC as the bond market infrastructure was responsible for the overall business scenarios and blockchain design, and cooperated with SPDB on the blockchain implementation. The business and technical teams of both parties set up multiple blockchain nodes to enable information disclosure, placement, etc., and successfully applied blockchain technology to part of the bond issuance process. In the future, CCDC will continue to strengthen fintech cooperation with SPDB and other market institutions, promote the application of fintech in bond life-cycle services, and provide better services for innovations in China's bond market.
https://www.chinabond.com.cn/cb/cn/gyzz/gsdt/20210325/156767348.shtml
https://news.spdb.com.cn/about_spd/xwdt_1632/202103/t20210323_2990852.shtml
https://www.chinabankingnews.com/2021/03/24/dbs-bank-china-issues-tier-2-capital-bonds-with-the-help-of-blockchain-technology/ (News article in English)
4 February 2021 - Poland’s Ministry of Finance to use blockchain-based reporting system for treasury saving bonds transactions
A joint partnership of institutions has launched a blockchain-based reporting system for Poland’s treasury saving bonds transactions in a European first. Coinfirm and IBM are the innovative technological partners of the initiative alongside financial heavyweights PKO Bank Polski and the National Clearing House that launched the system in December 2020 – with the participation of Poland’s Ministry of Finance. The network, built on the Hyperledger Fabric blockchain technology due to its strong decentralization and scalability, guarantees the immutability of data regarding transactions on treasury savings bonds. Specially-purposed apps will enable stakeholders to generate reports based on current and past transactions data.
Blockchain solutions streamline the system of treasury bonds for critical ecosystem stakeholders such as issuers, underwriters, registrars and investors – becoming a totally immutable network – minimizing redundant validations of bond transactions. The transaction life cycle recorded in this way will lead to increased understanding and shall continue Coinfirm’s mission of powering the mass adoption of the technology. 2020 was a record year for the sale of treasury savings bonds in Poland, amounting to a total of 28.4 billion PLN (~5.6 billion GBP) – an increase of 64.1% from 2019. All retail bonds offered by Poland’s Ministry of Finance are organized by the issuance agent PKO Bank Polski.
https://www.coinfirm.com/blog/treasury-bonds-blockchain/
29 January 2021 - SBI Group and SMBC establishment of joint venture to operate a digital securities trading system
SBI Holdings Co., Ltd. (President: Yoshitaka Kitao, hereinafter "SBIHD", the group is collectively referred to as the "SBI Group") and Sumitomo Mitsui Financial Group, Inc. (President and CEO: Jun Ota, hereinafter the group Collectively, the "SMBC Group") aims to operate PTS (Private Trading System), which handles stocks and security tokens, in March 2021 with the aim of contributing to the further development of the financial industry. SBI and SMBC have signed a basic agreement regarding the joint establishment of "tentative name, hereinafter" ODX ").
ODX plans to handle stocks first by the spring of 2022, and then start handling security tokens. Security tokens refer to securities issued using electronic means such as blockchain, and are positioned as the right to display electronic record transfer securities under the Financial Instruments and Exchange Act. STO (Security Token Offering), a financing method that utilizes security tokens, expands financing opportunities for asset finance backed by real estate, which was difficult until now, and project finance for venture companies, and also meets a wide range of needs for investors. The SBI Group and SMBC Group aim to improve the secondary market for security tokens and support the flexible financing of companies by operating the first PTS in Japan that handles security tokens through ODX.
http://www.sbigroup.co.jp/news/2021/0129_12307.html
29 January 2021 - SGX and Temasek JV ties up with Covalent to build end-to-end digital infrastructure
Singapore Exchange (SGX) and Temasek announced that its digital assets joint venture (JV) –Marketnode – has partnered with fixed income issuance and data firm, Covalent Capital (Covalent), to build Asia Pacific’s first, end-to-end digital infrastructure in the fixed income space. This latest development follows the JV announcement by SGX and Temasek on 22 January. As part of the partnership, Marketnode will acquire a minority stake in Covalent. Marketnode will tap on the accelerated need to digitalise and optimise workflows to meet demand for capital in Asia, starting with fixed income (FI). The partnership is poised to consolidate primary FI workflows as bond issuances continue to grow in Asia ex-Japan, where G3 primary issues have grown 46% to US$387 billion over the last two years, totalling more than 800 new issues in 2020 with more than 450 issuers and 200 arranger banks.
Through their partnership, Marketnode and Covalent will work together to streamline the listing, straight-through processing and settlement of bonds and activities in bond lifecycle management. It will connect Covalent’s flagship OMAS platform, which is a data, book building and allocations tool, with SGX’s listing, post-trade and asset servicing capabilities, thereby providing the Asian bond market with a unique, one-stop listing, issuance and lifecycle management platform. This builds upon SGX, Temasek and HSBC’s digital bond collaboration, which saw Olam International’s inaugural digital issuance in August 2020 and subsequent return with an additional S$250 million digital issuance in January 2021.
https://www.sgx.com/media-centre/20210129-sgx-and-temasek-jv-ties-covalent-build-end-end-digital-infrastructure
22 January 2021 - SGX and Temasek partner to advance digital asset infrastructure in capital markets
Singapore Exchange (SGX) and Temasek announced that they have entered into a joint venture (JV), which is set to be Asia Pacific’s first exchange-led digital asset venture focused on capital markets workflows through smart contracts, ledger and tokenisation technologies. This builds on the successful collaboration between SGX, Temasek and HSBC which culminated with the issuance of Asia’s first public syndicated digital bond for Olam International in August 2020. In all, SGX’s digital asset issuance, depository and servicing platform was used to issue four digital bonds by several issuers, with a total size of over S$1 billion.
The partnership between SGX and Temasek combines SGX’s multi-asset experience and strengths in operating market infrastructure to the highest regulatory standards, together with Temasek’s expertise in blockchain technology and ecosystem connectivity. The JV will look to partner with fixed income issuance platforms to connect to its post-trade and asset servicing infrastructure, providing issuers, arranger banks, lawyers, investors and paying agents with a comprehensive, issuance-to-settlement network for Asia bonds. Concurrently, the JV will focus on other existing and emerging asset classes that have seen growing market demand, including funds and sustainable finance.
https://www.sgx.com/media-centre/20210122-sgx-and-temasek-partner-advance-digital-asset-infrastructure-capital-markets
19 January 2021 - The Banque de France conducted a successful experiment with IZNES on the use of central bank digital money for interbank settlement purposes
On 17 December 2020, the Banque de France successfully carried out an experiment on central bank digital currency (CBDC) with IZNES as part of the experimental programme launched in March. The experiment consisted in the subscription and redemption by investors of money market fund units on a private Blockchain, provided by SETL, for a global amount exceeded 2 million euros. Cash settlements were simulated by central bank digital money issued on the blockchain. From a technological point of view, the experiment required the development and deployment of smart contracts so that the Banque de France could issue and control the circulation of CBDC tokens and ensure that their transfer takes place simultaneously with the delivery of the fund unit tokens into the investors' portfolio. The experiment was carried out in collaboration with IZNES, SETL, CACEIS, CITIGROUP, GROUPAMA AM, OFI AM and DXC.
This experiment represents a significant step forward in assessing the levers that a central bank digital currency provides for enhancing the efficiency and resilience of the settlement of financial asset in a blockchain environment, thereby contributing to the smooth functioning of the real economy. The programme's other experiments are ongoing until mid-2021 and all the lessons learned will be an important part of the Banque de France's contribution to the Eurosystem's more global reflection on the benefits of CBDC.
https://www.banque-france.fr/sites/default/files/medias/documents/experimentation_mnbc_iznes_19.01.2020_en.pdf
7 January 2021 - Deutsche Bank and Singapore fintech STACS announce collaboration for digital assets proof-of-concept
Deutsche Bank Securities Services and Hashstacs Pte Ltd (“STACS”) announced their collaboration to jointly explore a proof-of-concept related to the technological and practical feasibility of digital assets interoperability, liquidity, cross-border connectivity, and smart contract templates, including the support of sustainability-themed digital bonds.
STACS, in collaboration with Deutsche Bank Securities Services, was awarded the Proof-of-Concept (“POC”) grant on 29 October 2020, which provides funding support for experimentation, development and dissemination of nascent innovative technologies in the financial services sector. The POC grant is part of the Financial Sector Technology and Innovation ("FSTI”) scheme under the Financial Sector Development Fund administered by Monetary Authority of Singapore (“MAS”).
https://www.db.com/news/detail/20210107-deutsche-bank-and-singapore-fintech-stacs-announce-collaboration-for-digital-assets-proof-of-concept
https://stacs.io/deutsche-bank-and-singapore-fintech-stacs-announce-collaboration-for-digital-assets-proof-of-concept/
10 December 2020 - DBS to launch full-service digital exchange - providing tokenisation, trading and custody ecosystem for digital assets
DBS announced that it will set up a digital exchange, enabling Institutional Investors and Accredited Investors to tap into a fully integrated tokenisation, trading and custody ecosystem for digital assets. With the DBS Digital Exchange, DBS will leverage blockchain technology to provide an ecosystem for fund raising through asset tokenisation and secondary trading of digital assets including cryptocurrencies. This includes (i) Security Token Offerings, (ii) Digital Currency Exchange, and (iii) Digital Custody Services. The Security Token Offerings service is a regulated platform for the issuance and trading of digital tokens backed by financial assets, such as shares in unlisted companies, bonds and private equity funds.
The announcement follows the in-principle approval by the Monetary Authority of Singapore to recognise DBS Digital Exchange as a Recognised Market Operator, allowing it to operate organised markets for assets such as shares, bonds and private equity funds. Singapore Exchange (SGX) will take a 10% stake in the DBS Digital Exchange. Both parties will explore opportunities to deepen the liquidity, scale and growth of Singapore’s capital markets in the growing area of digital assets and digital currencies.
https://www.dbs.com/newsroom/dbs_digital_exchange
8 December 2020 - SIX and SBI Digital Asset Holdings announce plans for Singapore-based joint exchange venture
SIX Digital Exchange ("SDX") and SBI Digital Asset Holdings Co., Ltd., an SBI Group ("SBI") (8473) company announced their intentions to work towards a joint venture to drive institutional digital asset liquidity through a Singapore-based digital issuance platform, exchange and CSD venue that is set to go-live by 2022 subject to regulatory approvals from the Monetary Authority of Singapore. The contemplated joint venture announced by SBI and SIX is set to directly target the growing demand for public and private institutional digital assets, including regulated digital asset securities and cryptocurrency assets. The venture will market directly to regulated institutional clients , utilizing technologies from both companies to provide institutional grade services including issuing, listing, trading, CSD infrastructure and custody of digital assets and cryptocurrencies. It will leverage the extensive networks of SIX Digital Exchange in Switzerland and Europe, and SBI in the Asian Marketplace, as well as their joint expertise in facilitating Institutional clients’ needs.
As cryptocurrency transaction volumes grow with continued adoption by institutional money, regulated digital securities markets have been growing behind the scenes. This includes newly introduced assets into the market that are defined by on-ledger tokenized securities such as digital bonds, digital equities and digital securitized loans. Note – ‘digital’ here refers to the creation of native Distributed Ledger Technology (DLT)-based assets that are represented on chain and where transactions and corporate actions are verified. This new shift in market dynamics aims to be the focus of the proposed Singapore-based venture that target these “core” markets rather than retail and pure-cryptocurrency plays.
https://sdx.com/news/six-and-sbi-digital-asset-holdings-announce-plans-singapore-based-joint-exchange-venture-drive-institutional-digital-asset-liquidity
3 December 2020 - Bursa Malaysia and STACS complete blockchain POC to facilitate growth of the Labuan bond marketplace
Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) today announced the successful completion of the bond on blockchain proof-of-concept (“POC”) with Singapore’s Fintech technology provider, Hashstacs Pte Ltd (“STACS”).
The POC was designed to facilitate the growth of the bond marketplace at the Labuan Financial Exchange (“LFX”) by harnessing the opportunities afforded by blockchain technology and the tokenisation of assets. It was executed via three different methodologies which were ‘Industry Driven’, ‘Lean-Agile’ and ‘Technology Interaction’. The POC successfully demonstrated that digital bonds could be issued and managed on a blockchain and its attributes of a single source of truth, smart contracts and automation allow for new service expansion offerings.
The POC saw the industry taking its first step to explore the potential of blockchain and digital assets. With the completion of the first milestone, future phases will look towards further collaboration, co-development and implementation of new technology to expand the Malaysian capital market and empower discoveries of new opportunities.
https://www.bursamalaysia.com/about_bursa/media_centre/bursa-malaysia-completes-blockchain-poc-to-facilitate-growth-of-the-labuan-bond-marketplace
https://stacs.io/singapore-fintech-company-stacs-completes-blockchain-project-with-malaysias-national-stock/
15 September 2020 - BNP Paribas Securities Services joins forces with Digital Asset to develop DLT trade and settlement apps
BNP Paribas Securities Services announced its partnership with Digital Asset to design a number of real-time trade and settlement apps using DAML smart contracts. The new apps will provide market participants in Asia Pacific with real-time access to the Australian Securities Exchange (ASX) and Hong Kong Exchange (HKEX)’s anticipated DLT-based trading and settlement platforms. The apps will also be available to clients in markets that have not integrated DLT, bringing them the benefit of real-time workflows.
BNP Paribas will connect to the ASX CHESS+ platform and the anticipated HKEX Synapse solution via the new Ledger Application Programming Interface for real-time information flows. In Australia, BNP Paribas will take a segregated node in the ASX CHESS+ distributed ledger, enabling the bank to offer its clients the full benefits of smart contract technology, including real-time information, rapid innovation and workflow automation from issuer to investor.
https://securities.cib.bnpparibas/bnp-paribas-securities-services-joins-forces-with-digital-asset-to-develop-dlt-trade-and-settlement-apps/
https://blog.digitalasset.com/press-release/bnp_daml
1 September 2020 - SGX, in collaboration with HSBC and Temasek, completes pilot digital bond for Olam International
Singapore Exchange (SGX), working together with HSBC Singapore and Temasek, has completed its first digital bond issuance on SGX’s digital asset issuance, depository and servicing platform, successfully replicating a S$400 million 5.5-year public bond issue and a follow-on S$100 million tap of the same issue by Olam International. SGX utilised DAML, the smart contract language created by Digital Asset, to model the bond and its distributed workflows for issuance and asset servicing over the bond’s lifecycle. SGX’s solution uses smart contracts to capture the rights and obligations of parties involved in issuance and asset servicing, such as arrangers, depository agents, legal counsel and custodians. The digital bond used HSBC’s on-chain payments solution which allows for seamless settlement in multiple currencies to facilitate transfer of proceeds between the issuer, arranger and investor custodian.
Key efficiencies observed within the pilot include timely ISIN (identifier) generation, elimination of settlement risk (for issuer, arranger and investors), reduction in primary issuance settlement (from 5 days to 2 days) as well as automation of coupon and redemption payments and registrar functionality. For more information, please visit this webpage. Building on this digital issuance, SGX will work with issuers, arrangers, custodian banks and investors to digitalise bond issuance, depository and asset servicing, progressively growing the fixed income ecosystem.
https://www.sgx.com/media-centre/20200901-sgx-collaboration-hsbc-and-temasek-completes-pilot-digital-bond-olam
13 August 2020 - Philippines Bureau of the Treasury launches mobile app to enable retail treasury bonds purchasing
The Philippines’ first mobile application that allows small investors to buy government securities with their smartphones has enabled the government to raise about P48 million from the sale of the five-year PROGRESO Retail Treasury Bonds (RTBs), the Bureau of the Treasury (BTr) reported. These bonds were offered to the public from July 16 to August 7, 2020. The app was launched by the BTr last July 16 in partnership with Union Bank of the Philippines (UnionBank) and the Philippine Digital Asset Exchange (PDAX). The app was designed to make purchasing government bonds more convenient, especially with quarantine protocols in place worldwide.
The PROGRESO bonds were offered with a 2.625% fixed annual interest rate payable every quarter, and a maturity date on August 12, 2025. Earnings from RTBs like the PROGRESO bonds are relatively higher compared to bank time deposits that offer an average of 1.125% interest for the same five-year tenor. As with the BTr's recent offerings, the online ordering facility viawww.treasury.gov.ph/rtb was also made available, providing an effective and convenient online channel for investors, especially overseas Filipinos, to invest in RTB 24. These digital platforms allow investors to buy RTBs without them having to physically go to banks to make such purchases. The BTr raised a total of P516.3 billion from its issue of the PROGRESO bonds over the three-week offer period. The total issue size consisted of P488.5 billion in new subscriptions and P27.8 billion more from the bond exchange program
https://www.treasury.gov.ph/wp-content/uploads/2020/08/BTR_PR_BondsPH.pdf
29 July 2020 - Bursa Malaysia and Fintech Provider Hashstacs To Develop Blockchain PoC To Facilitate Growth of the Labuan Bond Market
Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) and Singapore’s Fintech technology provider, Hashstacs Pte Ltd (“Hashstacs”) embarked on a bond on blockchain proof-of-concept (“POC”), to facilitate the growth of the bond marketplace at the Labuan Financial Exchange (“LFX”). The project, dubbed Project Harbour aims to explore and harness the opportunities afforded by blockchain technology and the tokenisation of assets.
Bursa Malaysia, alongside the Securities Commission of Malaysia, Labuan Financial Services Authority, CIMB Investment Bank Berhad, Maybank Investment Bank Berhad and China Construction Bank Corporation Labuan Branch, will utilise the Trident Platform built by Hashstacs to test and manage the end to end trade lifecycle management of tokenised bonds. The blockchain-based platform will facilitate the issuances of tokenised bonds seamlessly while providing a single source of truth to maintain the integrity of investors holdings and track transactions. In addition, smart contract technology automates the movement of funds and securities, amplifying asset servicing and the provision of liquidity to market participants.
https://www.bursamalaysia.com/about_bursa/media_centre/bursa-malaysia-and-fintech-provider-hashstacs-to-develop-blockchain-poc-to-facilitate-growth-of-the-labuan-bond-market
3 June 2020 - Pilot Test of DLT Information Sharing Platform in the Field of Securities Post-Trade - Selection of Use Cases for Verification
Further to its announcement on 6 March 2020, Japan Exchange Group, Inc. (hereinafter "JPX") and Japan Securities Depository Center, Inc. (hereinafter "JASDEC") announced that they have selected three use cases for verification using a DLT test environment developed by JPX-led consortium in their pilot test project of a DLT information sharing platform in the field of securities post-trade launched in April 2020. The project participants submitted issues related to securities post-trade from their perspectives as industry practitioners. The issues were then categorized into nine use cases. In reviewing these nine use cases, consideration was given to the effects at the time of its practical application and feasibility for testing in a limited period of time.
While all the nine use cases are considered to be potentially effective in resolving the issues of the industry, JPX and JASDEC, after the consultation with the participants, have selected three use cases to be verified in this project due to the limited test period: (1) Sharing fund/SSI/basic corporate information, (2) Resolution of non-compatibility of fund distribution networks, and (3) Sharing information on borrowing/lending fee/collateral rate and equivalent dividend amount in stock borrowing and lending transactions.
https://www.jpx.co.jp/english/corporate/news/news-releases/0010/20200603-01.html
18 May 2020 - Billon and Raiffeisen Bank International to Pilot Digitized National Currency
Billon and Raiffeisen Bank International successfully tested an end-to-end digitized national currency transfers PoC as part of the Elevator Lab acceleration program. The Polish-British fintech and the Austrian bank are developing initial phases of an RBI Tokenization Platform, and will pilot this platform for selected use cases, like real-time tokenized money transfers or improving the cut-off time for custody customers. The pilot aims to demonstrate how companies can improve their liquidity management, speed and availability of cross country funds transfers and facilitate new business processes.
https://billongroup.com/en/billon-and-raiffeisen-bank-international-to-pilot-digitized-national-currency/
18 May 2020 - DTCC Unveils Proposals to Explore Further Digitalization in the Public & Private Markets
The Depository Trust & Clearing Corporation (DTCC) unveiled plans to explore the benefits of digitalization in the public and private markets and whether new technologies can strengthen post-trade processes and reduce risks and costs. DTCC’s proposals are contained in two case studies that advance the organization’s efforts to evaluate new ways to enhance post-trade processes through the digitalization of assets. The case studies – Project Ion and Project Whitney - are the latest efforts by DTCC to examine the potential use of DLT, asset digitalization and other emerging technologies. Project Ion seeks to build on DTCC’s successful efforts over the past several years to further optimize the settlement process in the public markets, while Project Whitney considers opportunities to provide increased levels of digitalization throughout the private market asset lifecycle.
Both Project Ion and Project Whitney remain in the experimentation stage, and a decision to progress the projects will be determined following further analysis and feedback from the industry.
https://www.dtcc.com/news/2020/may/18/dtcc-unveils-proposals-to-explore-further-digitalization
17 March 2020 - Financial institutions team up to develop FundsDLT, a groundbreaking blockchain-based platform for the investment fund industry
Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange, and Natixis Investment Managers have announced a Series A investment in FundsDLT to develop a novel decentralised technology platform to facilitate the distribution of funds based on distributed ledger technology (DLT). This move marks a major milestone in the evolution of FundsDLT, originally initiated and incubated by the Luxembourg Stock Exchange and its affiliate Fundsquare.
FundsDLT is built using permissioned blockchain technology based on Ethereum, that ensures privacy and high performance. FundsDLT enables the reengineering of the fund distribution value chain, from front to back, covering the entire fund lifecycle. The platform allows asset managers, distributors, asset servicers, and the entire supply chain to reduce costs by removing redundant activities, while providing the opportunity to achieve necessary transparency on end investors and creating the foundation for digital fund distribution. The Series A funding will strengthen the FundsDLT platform and accelerate its commercial development.
https://www.credit-suisse.com/about-us-news/en/articles/media-releases/financial-institutions-team-up-to-develop-fundsdlt--a-groundbrea-202003.html
6 March 2020 - Pilot Test of DLT Information Sharing Platform in the Field of Securities Post-Trade by Japan Exchange Group (JPX)
Japan Exchange Group, Inc. (hereinafter referred to as "JPX".) and Japan Securities Depository Center, Inc. announced today that they will launch pilot testing of a DLT information sharing platform for securities post-trade information in April this year, under JPX’s "Proof of Concept Testing for Utilization of Blockchain/DLT in Capital Market Infrastructure" program. NEC Corporation will be the IT support vendor.
"Securities post-trade" refers to all processes which occur after a securities transaction is executed. Because most of these processes are conducted mutually, it has been pointed out that mismatches in understanding between counterparties about data and workflows can lower efficiency. An information sharing platform using DLT, which excels in synchronizing recording and execution of data and workflows, would enable companies to check the latest definitive status of a trade at any time, possibly solving various problems in the post-trade field that companies struggle to solve alone.
https://www.jpx.co.jp/english/corporate/news/news-releases/0010/20200306-01.html
13 November 2019 - HSBC partners with SGX and Temasek to explore DLT for fixed income
HSBC Singapore announced a trial with Singapore Exchange (“SGX”) and Temasek to explore the use of distributed ledger technology (“DLT”) for the issuance and servicing of fixed income securities, the first such end-to-end digitalisation initiative focusing on the Asia bond markets.
While Asia’s fixed income markets continue to see rapid growth, bond issuance and servicing processes remain inefficient due to the absence of a single platform for the exchange of information between multiple parties and tracking of a bond throughout its lifecycle. The trial will make use of tokenised securities and smart contracts over a permissioned ledger to streamline these workflows and reduce process friction, lowering costs for issuers, investors, bond arrangers and custodians.
https://www.about.hsbc.com.sg/news-and-media/hsbc-partners-with-sgx-and-temasek-to-explore-dlt-for-fixed-income
15 November 2019 - SEC announces Master Blueprint for Thai Capital Market to kick off DLT platform with corporate bond as pilot project
The SEC has announced the Master Blueprint for Thai capital market, which includes the launch of Distributed Ledger Technology (DLT) as the new digital platform for capital market transactions to increase efficiency, reduce costs and facilitate market accessibility. The DLT pilot project will apply to corporate bond business.
“The Master Blueprint contains the overview of how the Thai capital market can apply DLT to various processes, from issuance and offering for sale in the primary and secondary markets to post-offering processes related to corporate bonds, SME shares, mutual funds and derivatives. The new digital platform also covers clearing and settlement, register of instrument holders, custody of instruments, and payment of interest or dividends.
https://www.sec.or.th/EN/Pages/News_Detail.aspx?SECID=7829&NewsNo=166&NewsYear=2019&Lang=EN
23 November 2018 - Sberbank, NSD and MTS close deal on commercial bond issue using blockchain
Sberbank, the National Settlement Depository (NSD) and MTS have summed up results of the deal to issue commercial bonds using blockchain. The nominal cost of MTS’s RUB 750 mln commercial bonds, organised and purchased by the corporate and investment banking business of Sberbank, was redeemed. A security deal using smart contracts – from issue to full execution of issuer’s obligations to the investor – was successfully carried out. Commercial bonds are privately-traded unsecured fixed income securities that are placed on the OTC market through a private subscription. Prior to the transaction, a complete delivery versus payment settlement model was created using blockchain, which allows securities and money to be transferred simultaneously. The option to dynamically change the list of participants was added to work with a wide range of investors, and the latest version of Hyperledger Fabric was used.
The NSD allowed the parties to use its blockchain platform – based on Hyperledger Fabric 1.1 – to carry out the transaction. The issuer, NSD and investor had access to the decentralised platform to carry out the deal. During the project, the confidentiality of work with accounts was provided, and special aspects of Russian law were taken into account.
https://www.sberbank.ru/en/press_center/all/article?newsID=e4c66f82-8a9a-4e13-a43e-8defe3632a7c&blockID=1539®ionID=77&lang=en&type=NEWS
10 October 2018 - ING’s Katana Lens sharpens investor decisions on bonds
ING is continuing to improve decision-making in bond trading. On 10 October, the bank announced Katana Lens, an artificial intelligence (AI) tool that helps investors to easily find and compare interesting trade ideas. Co-created with Dutch pension fund PGGM, Katana Lens is a web-based application that uses predictive analytics to help bond investors make faster and sharper decisions within minutes.
Katana is the result of intensive research and development by ING’s Financial Markets Global Credit Trading team in London and the Wholesale Banking Advanced Analytics team. The first results of testing Katana with the emerging markets (EM) desk in London show faster pricing decisions for 90% of trades; reduction in trading cost by 25%; and traders are able to offer clients the best price four times more frequently.
https://www.ingwb.com/insights/news/2018/katana-lens-sharpens-investor-decisions-on-bonds
16 May 2018 - Sberbank CIB and MTS issue bonds with settlement in roubles using smart contracts via NSD blockchain platform
Sberbank CIB, the corporate and investment banking business of Sberbank, MTS, a leading Russian telecoms operator, and the National Settlement Depository (NSD) have placed commercial rouble-denominated bonds using smart contracts. The NSD allowed the parties to use its blockchain platform – based on Hyperledger Fabric 1.1 – to carry out the transaction. The MTS bond issue, which is worth RUB 750 bln and has a maturity of six months, was organised by Sberbank CIB.
The bond placement, circulation and record keeping process is highly transparent as the system only operates using digitalised assets. Each participant can exchange documents online and track the status of the transaction. Settlements are carried out in the ledger system, which considerably speeds up the transaction. The cryptographic protection scheme allows all operations to be carried out electronically using the electronic signatures held by clients of Moscow Exchange Group. The source code of the smart contracts can be found on Github and is publically available in compliance with the Hyperledger project, which Sberbank and the Moscow Exchange Group have participated in since 2016.
https://www.sberbank.ru/en/press_center/all/article?newsID=bfbc4479-6a04-46f2-9d52-0b81093590aa&blockID=1539®ionID=77&lang=en&type=NEWS
10 January 2018 - BNP Paribas Asset Management successfully completed a full end-to-end fund transaction test late last year, using blockchain technology
The test has been conducted leveraging on BNP Paribas Securities Services’ blockchain programme, PlanetFunds*, and FundsDLT, a blockchain based decentralized platform for fund transaction processing, which has been developed through collaboration between Fundsquare (a subsidiary of the Luxembourg Stock Exchange), InTech (a subsidiary of POST Group) and KPMG Luxembourg.
The test demonstrated that PlanetFunds is able to connect with other blockchains, opening the door to a new model of interoperability and marks a key milestone for fund distribution. The transaction included each part of the fund trade process, from delivery of the order to the processing of the trade.
https://mediaroom-en.bnpparibas-am.com/news/bnpp-am-completes-end-to-end-fund-transaction-test-using-blockchain-f2c1-0fb7a.html
27 September 2017 - SEB and Nasdaq to Build Blockchain for Swedish Mutual Fund Market
SEB, the Nordic financial services group, and Nasdaq, Inc. (Nasdaq:NDAQ) have announced a joint project to test a developed prototype for a mutual fund trading platform based on blockchain technology. The aim is to increase efficiency in the processing of purchases and sales of fund units and to create a unit ledger – an area which today is largely characterized by manual routines, long settlement cycles and paper driven processes. […]
The concept of the project indicates that, by subscribing to a private blockchain, the various market participants—fund companies, distributors and others—will be able to share a distributed database in which all transactions and changes are registered among all participants in real-time. The cooperation agreement entails that SEB and Nasdaq will continue to develop the technology with the end goal of creating a working prototype, which will be based on the Chain.com blockchain ledger.
https://business.nasdaq.com/mediacenter/pressreleases/1621844/seb-and-nasdaq-to-build-blockchain-for-swedish-mutual-fund-market
15 September 2017 - SETL and four asset management firms are launching IZNES, the pan-European fund record-keeping platform based on blockchain technology
SETL and four asset management firms announced today the launch of IZNES, the pan-European fund record-keeping platform based on blockchain technology. The platform provides investors, asset management firms, distributors and wealth management advisers with easy and rapid access to fund units. The platform enables firms to enter into new relationships with investors, manage KYC processes, handle subscription / redemption instructions, and settle transactions and record positions.
Compatible with all distribution channels, IZNES reduces transaction costs, increases transparency, and optimises operational workflow. It will also enable new value-added services to be developed. IZNES relies on proprietary technology developed by SETL. To ensure the best possible service, the functional specifications were defined in line with user input and contributions. The initial version was delivered by SETL in July 2017 and validated by OFI AM, Groupama AM, La Financière de l’Échiquier, and Arkéa Investment Services.
https://setl.io/
7 May 2017 - First real blockchain transaction completed in fund distribution with FundsDLT
Natixis Asset Management, a leading affiliate of Natixis Global Asset Management, indicated that a pilot investor in a test of blockchain smart contract prototype successfully purchased shares in Natixis AM’s funds through the blockchain-powered fund distribution platform for fund managers, FundsDLT. […]
FundsDLT is the result of collaboration between Fundsquare (a subsidiary of the Luxembourg Stock Exchange), InTech (a subsidiary of POST Group) and KPMG Luxembourg. The platform is being developed to enable asset managers to sell funds through a new distribution channel, while significantly reducing administration costs and the time to process transactions for both asset managers and other asset servicers. FundsDLT intends to streamline a range of fund administration and order-routing tasks by using blockchain to automate several processes in a secure manner. The model is applicable to a wide range of funds and does not depend on the jurisdiction.
https://www.caceis.com/whats-new/press-releases/press-releases/article/first-real-blockchain-transaction-completed-in-fund-distribution-with-fundsdlt/detail.html
Contacts:
Gabriel Callsen
Senior Director, FinTech and Digitalisation; Secretary to the ICMA FinTech Advisory Committee (FinAC)
Direct line: +44 20 7213 0334
