PH to sell maiden blockchain-backed bonds

In a move toward embracing digitalization, the Bureau of the Treasury is set to launch its maiden tokenized bond issuance, aiming to raise at least ₱10 billion.

In a statement, the Treasury said these digital peso-denominated IOUS will be offered with a minimum denomination of ₱10 million, which means it caters to larger investors looking to diversify their portfolios.

The tokenized treasury bonds will be offered on Nov. 20.

The government’s decision to issue tokenized bonds reflects the increasing interest of Asian countries in the tokenized bond market. In February, Hong Kong issued $100 million in tokenized green bonds.

A tokenized bond is a digital version of a regular bond. But instead of having a physical document, it exists as a digital token on a computer system called a blockchain.

This makes it easier to buy, sell, and keep track of the bond because everything is done electronically.

“It's kind of like how you can use a digital wallet to store and manage your money instead of carrying around physical cash,” an analyst explained. “Tokenized bonds make it simpler and more efficient to invest in bonds using technology.”

The Treasury tapped the Land Bank of the Philippines and Development Bank of the Philippines (DBP) as it issue managers.

“As part of the national government’s government securities digitalization roadmap, the maiden issuance of TTBS [tokenized Treasury bonds] aims to provide the proof of concept for the wider use of DLT [distributed ledger technology] in the government bond market,” the bureau said.

“This proof of concept will serve as the starting point of the NG’S broader agenda of democratizing investment through digital technology, significantly reducing settlement risk and friction costs, ultimately leading to a financially inclusive local bond market,” it added. (Chino Leyco)