The Philippines government is about to embark on the next phase of its government bond tokenization path. Last year it tokenized bonds targeting institutional investors. That was followed by releasing 90 day Treasury Bills available to retail investors. Now the Bureau of the Treasury is planning to distribute longer term tokenized Treasury Bonds, or GBonds, in December targeting consumers.
Its primary distribution mechanisms will be via GCash and PDAX. GCash is the wallet app that has been used by 94 million people and was recently valued at $5 billion. Ant, the owner of Alipay owns around a third of GCash parent Mynt and MUFG owns 8%. PDAX is a cryptocurrency exchange with around four million users that has already been distributing the Treasury Bills, with a minimum investment of 500 pesos ($8.52).
“We envision a future where investing in government bonds is no longer a luxury but a new normal for Filipinos — with just a few swipes away and as easy as ordering their favorite food delivery,” said Ralph Recto, the Philippines Secretary of Finance. “This empowers our people to effortlessly secure their future, all from the comfort of their homes.”
The government news agency said Recto called for GCash and PDAX to speed up the launch.
The country already has retail government bonds, but the minimum investment is ten times higher at 5,000 pesos. PDAX, who we suspect is providing the tokenization technology, says one of the key benefits is reducing the administration costs to support the smaller denominations.
In 2020, the government first explored using blockchain for retail government bonds and launched the Bonds.PH app in collaboration with UnionBank. Back then, the bank also partnered with PDAX for the blockchain aspect.
Other tokenized government bonds
Issuing tokenized government bonds as digital twins, or natively digital bonds, is becoming increasingly popular, although most still target institutions. Slovenia became the first European state to issue a digital bond, and the UK is planning one in the next two years. The largest digital government bod so far was a multicurrency green bond issuance worth $756m by Hong Kong.
