On Monday, November 20, the Philippines is set to make history by introducing its inaugural sale of tokenized treasury bonds, a significant move aimed at advancing the development of its domestic debt market.

The Bureau of the Treasury has disclosed plans to present a minimum of 10 billion pesos ($179 million) worth of one-year tokenized bonds, leading to the cancellation of the initially scheduled regular bills auction on the same day, as reported by Bloomberg on November 16.

The adoption of blockchain and tokenized securities for fundraising has gained traction in Asia, with Hong Kong successfully issuing HK$800 million in tokenized green bonds in February. These securities leverage distributed ledger technology (DLT), holding the promise of enhancing liquidity and transparency within debt markets.

Additionally, HSBC Holdings announced earlier this month that it has successfully conducted test token deposits in intra-group treasury transactions using blockchain technology.

Details of Philippines bond offering

Notably, The Bureau of the Treasury’s notice of offering reveals that the tokenized bond, maturing in November 2024, will be offered to institutional buyers in minimum denominations of 10 million pesos, with increments of 1 million pesos. 

The final interest rate will be determined through book-building and is slated for announcement on November 20. Acting as issue managers for this groundbreaking initiative are the state-owned Development Bank of the Philippines and the Land Bank of the Philippines.

Other ventures into the digital domain by world banks

Just yesterday, on November 15, Commerzbank AG was granted a cryptocurrency custody license, signaling a growing acceptance of the asset class among European banks

Moreover, in response to growing client interest, several banks, including Commerzbank, are exploring the realm of cryptocurrency. 

In July, Societe Generale SA’s blockchain unit secured the first license granted under France’s newly established cryptocurrency regulations. Meanwhile, DZ Bank AG, a German cooperative lender, has unveiled plans to launch a platform dedicated to the secure custody of digital assets.

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