The National University of Singapore (NUS), Northern Trust and Singaporean bank UOB have partnered to tokenize green bond data. As part of Singapore’s Project Guardian trials, data relating to NUS’ third green bond, issued in 2023 has been tokenized on the Northern Trust Matrix Zenith platform.
Northern Trust launched the platform last year, which is integrated with its core asset servicing infrastructure. So it’s not the bond itself that’s tokenized, just the credential for environmental impact reporting data. The purpose is to provide “secure, immutable, and reliable” data for ESG reporting purposes.
UOB was the lead arranger of the original bond and it will solicit feedback on how tokenizing data will help with investor reporting practices.
The project falls under the fixed income stream of Project Guardian, which is exploring the benefits of tokenization.
“This initiative is a testament to the transformative potential of blockchain technology in green finance,” said Justin Chapman, Global Head of Digital Assets and Financial Markets at Northern Trust. “By leveraging our Matrix Zenith platform, we are ensuring the integrity and transparency of green bond reporting data, addressing critical needs for investors while paving the way for a more sustainable financial ecosystem.”
Green data tokens versus green bonds
It’s not uncommon to log data relating to bonds or carbon credits on a blockchain to ensure immutability. For example, in late 2023 Hitachi issued a digital green bond and also used blockchain to track the data. However, the separate data tokenization in the NUS case is more novel.
In 2022 Goldman Sachs was involved in a trial with the Hong Kong Monetary Authority in which the underlying tokenized bond could trade more like a vanilla bond, separately from the green aspect – the tokenized “mitigation outcome interests” (MOIs).
Yet another example, which is not bond specific, is Inveniam. It’s a company that is actively using blockchain data credentials for the purposes of valuing tokenized assets.
