Today the Philippines Bureau of the Treasury announced it will launch Tokenized Treasury Bonds on Monday. The bond issuance will raise P10 billion ($179 million) and is available to institutional investors in minimum denominations of $179,000.
While the Treasury plans to use its distributed ledger technology (DLT) registry, it is not the primary ledger. As with many other proofs of concept, the official bond record is the National Registry of Scripless Securities (NRoSS) which will run in parallel.
The Treasury hopes it will demonstrate reduced settlement risk and friction “leading to a financially inclusive local bond market.” One of the goals of deploying blockchain is to reduce issuance and administration costs. This should lead to smaller denominations or fractionalization.
However, it’s not the first blockchain usage for government bonds in the Philippines. Back in 2020, a blockchain solution was used as part of an app, bonds.ph, to enable consumers to buy retail treasury bonds (RTB). Thailand conducted a similar retail exercise around the same time.
For institutional government bonds, in February Hong Kong issued a $100 million tokenized green bond. While the European Investment Bank (EIB) doesn’t issue ‘government bonds’, it is the most prolific issuer of tokenized bonds. So far it has issued four and still has some in the works. Likewise, the World Bank recently issued a €100 million digitally native bond in October.
Meanwhile, Israel ran a trial for blockchain government bonds and the UK is exploring it.
