Philippines Treasury to Issue Tokenized Bonds Amid Growing Asian Interest in Blockchain Technology
Summary:
The Philippines Treasury Department plans to introduce one-year tokenized treasury bonds worth 10 billion pesos ($179 million) for institutional investors after cancelling traditional auction. The bonds, to be issued by state-owned Development Bank of the Philippines and the Land Bank of the Philippines, signify a growing trend in Asia of using blockchain technology for tokenizing real-world assets. Countries like Singapore and UAE are also exploring this trend, in collaboration with financial giants like JPMorgan, DBS Bank, and HSBC.
The Treasury Department of the Philippines shared its plan to introduce 10 billion peso ($179 million) tokenized treasury bonds with a one-year term. Originally, a traditional auction was scheduled for November 20, but it has been called off. The treasury bonds, which are tokenized, will be available to institutional investors with a minimum order of 10 million pesos and an additional order can be increased in increments of 1 million pesos. These bonds, which expire in November 2024, will have their final interest rate revealed on the day of issuance, as indicated by a Bloomberg report. The issuing bodies for these bonds are the Land Bank of the Philippines and the Development Bank of the Philippines, both owned by the state.
When quizzed about any plans to keep utilizing tokenized bonds and other such assets in the future, Deputy Treasurer Erwin Sta responded that they would continue to explore the technology and its full potential. The issuance of tokenized bonds, in place of traditional variants, reflects the escalating interest in the tokenized bond market among governments in Asia. At the beginning of the year, Hong Kong issued tokenized green bonds valued at $100 million as part of its Green Bond Programme. To tokenize these one-year bonds, it utilized the tokenization protocol from Goldman Sachs.
Joining the growing trend, Singapore recently commenced a series of test runs for tokenizing real-world assets. This was done in collaboration with investment firm Apollo, DBS Bank, BNY Mellon, and JPMorgan. Equally notable is the pairing of the United Arab Emirates with HSBC banks in bond tokenization.
In addition to this trend in Asia, the Tel Aviv stock exchange conducted a proof-of-concept for tokenizing government bonds and fiat. The tokenization trend of tangible assets via blockchain technology has witnessed adoption by governments after various successful proofs-of-concept in past years. Its popularity continues to surge, riding on the interest of financial heavyweights such as JP Morgan, HSBC, and others.
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Published At
11/16/2023 8:19:59 AM
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