Gov’t set to launch Phl’s first tokenized bonds

‘The Tokenized Treasury Bonds or digital bonds will serve as the starting point of the national government’s broader agenda of democratizing investment through digital technology’

The government on Monday will launch the country’s first Tokenized Treasury Bonds or digital bonds for domestic investors to raise at least P10 billion.

“This proof of concept will serve as the starting point of the national government’s broader agenda of democratizing investment through digital technology,” the Bureau of the Treasury on Thursday said in a statement.

Tokenized bonds ease transfer of ownership rights to investors at the secondary market and break down the bonds into smaller lot sizes.

Financially inclusive bond market

“The tokenized bonds significantly reduce settlement risk and friction costs, ultimately leading to a financially inclusive local bond market,” the BTr said.

The BTr said the one-year tokenized bonds will have a fixed interest rate to be paid semi-annually. Investors can place subscriptions with minimum denominations of P10 million and increments of P1 million.

The Treasury said transactions for such bonds will be recorded using the Distributed Ledger Technology Registry, which is part of the National Government’s Government Securities Digitalization Roadmap.

Digital investing in the country

The digital registry will be backed by the BTr’s primary tool, the National Registry of Scripless Securities as the government further develops digital investing in the country.

Qualified institutional investors must submit their bids before 12:30 p.m. on 20 November.

This will be done through the submission of Firm Commitment Letters to the issue managers, namely the Land Bank of the Philippines and Development Bank of the Philippines.