Blockchain Breakthrough: Philippines Pioneers $270 Million Tokenized Bond Sale

According to a Bloomberg Report, the Philippines has successfully sold $270 million worth of its first tokenized Treasury bonds. Investor interest in the tokenized bonds, which have a 6.5% coupon rate and are due in Nov 2024, was very high. Furthermore, the Philippine government has received praise for its attempts to integrate digital technologies into the bond market.

The Tre­asury Department (BTr) announced that bids for the­ digital Treasury bonds (TTBs) totalled a massive 31.426 billion pe­sos. This is well over three­ times the 10 billion pesos base­ offer. It looks like institutional investors re­ally want peso-related digital asse­ts. This proves the government’s varied plan works.

The BTr has appointed the Land Bank of the Philippines and the Development Bank of the Philippines (DBP) as designated issue managers for Tokenized Treasury Bonds (TTBs). Tasked with overseeing the issuance, these institutions will present TTBs featuring a fixed rate for one year.

The official offering of the tokenized bonds will begin on Nov 20, and the issuance will commence on Nov 22.

As a pivotal step outlined in the Government Securities Digitalization Roadmap of the National Government, the first issuance of Tokenized Treasury Bonds (TTBs) stands as a proof of concept for the broader integration of distributed ledger technology (DLT) in the government bond market. Additionally, this strategic initiative seeks to minimize risks and reduce costs linked to conventional bond transactions.

Philippines Explores Tokenized Bonds: Borrow Up To PHP10 Million Amid Treasury Norms

Moreover, Qualified investors may borrow up to PHP10 million (US$179,229) in tokenized bonds, with a maximum borrowing of PHP1 million (US$17,923) under Treasury norms. On Nov 20, offers were to be submitted by about 12:30 p.m. Later that same day, the authorities will declare whose suggestions have been accepted.

The Philippines is now investigating tokenized real-world assets alongside other regional nations. Hong Kong successfully issued a tokenized green bond worth HKD800 million (US$102.5 million) earlier this year, leading to this development.

The well-known financial center of Singapore has also embraced blockchain technology, collaborating with organizations such as JPMorgan, DBS Bank, and BNY Mellon to establish experimental projects.

However, Erwin Sta. Ana, the deputy treasurer of BTr, stressed the significance of this proof of concept, noting that it provides the foundation for the National Government’s larger plan to democratize investment through digital technology.

Ultimately, the effort hopes to promote a local bond market accessible to all by drastically lowering settlement risks and friction costs.

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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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