The World Bank has been courageous in issuing bonds on the blockchain in mid-2018. BBVA has recently issued a structured green bond and Santander and Société General have also stepped up with bonds too. With the exception of the World Bank, all the other bonds are first ones and or internal placements.
In late 2019, Bank of China issued 20 billion yuan — $2.8 billion — in blockchain-based bonds for SMEs with their own blockchain platform.
BondEvalue would deploy a permissioned blockchain infrastructure to enable electronic trading of bonds in $1,000 denominations with instant settlement (clearing obviously too) and greater price transparency. The focus will be on large high-grade bonds that through tokenization can be fractionalized.
The bond market remains a market with high bid ask spreads and problematic liquidity for small lots (in the 10s thousands) even for large, high-grade bond issues.
This is a sample of the bonds listed currently on BondEvalue.
The incumbent that will custody the tokenized bonds is Northern Trust. The US bank that ranks 24th in the US (by assets) and globally 10th as a custodian bank (by assets under custody).
Northern Trust is not an amateur with regards to blockchain. Their innovation and research center built and sold a blockchain platform for private equities. Broadridge Financial bought the platform from Northern Trust this past summer. They are developing it further by integrating their own blockchain patent for proxy voting at annual shareholder`s meetings.
BondEvalue sets the tone for the new decade and for more DLT implementations in financial services to upgrade archaic business processes in the post-trade lifecycle of various financial instruments. While these steps forward can reduce overall costs, counterparty risks can improve transparency and liquidity; I have to call them out as mere tech upgrades with permissioned patent-protected technologies.