The settlement service is far from the first to issue digitalized securities, but it is a significant step because of its size.
Euroclear has launched a digital securities issuance service and settled a 100-million-euro ($106 million) digital World Bank bond. This is the first step in the Brussels-based settlement house’s digital infrastructure strategy, it said.
The three-year bond, which is being called a digitally native note, was issued by World Bank lending arm International Bank for Reconstruction and Development to raise funds for sustainable development. It was listed on the Luxembourg Stock Exchange and was completed on Oct. 23.
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Euroclear’s digital infrastructure is connected to its traditional platform for secondary operations and is compliant with the European Union’s Central Securities Depositories Regulation. It operates on R3’s Corda blockchain technology. World Bank Group managing director and chief financial officer Anshula Kant said:
“A transition to digitisation is underway in the capital markets. Euroclear’s new service offers issuers and investors an opportunity to take another step along this journey.”
The issuance was settled under English law. Citi Issuer Services acted as the issuing and paying agent and TD Securities was the issuer agent.
R3’s Corda powers first digital bond issuance on Euroclear’s Digital Financial Market Infrastructure | R3 https://t.co/rF4A7cErTq
— Digital Assets Daily (@AssetsDaily) October 24, 2023
Euroclear, one of the world’s largest securities settlement houses, is following in the steps of a considerable number of predecessors. The World Bank issued the world’s first digital bond in 2018. This year alone, digitalized bonds have been issued in Hong Kong in Hong Kong dollars and in Chinese yuan. The Luxembourg Stock Exchange registered its first digital bond, denominated in Swedish krona, in June.
The Tel Aviv Stock Exchange completed a proof-of-concept for tokenizing bonds in June. DTCC, another large settlement house, announced the acquisition of digital infrastructure developer Securrency on Oct. 19, expecting to put itself “in a leading position to unlock the value of digital assets.”
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