Key Takeaways :
- Philippines debuts tokenized treasury bonds, aiming for $179 million funding.
- The Treasury plans to offer 10 billion pesos (about $179 million) in one-year tokenized bonds.
The Philippines is set to redefine its financial landscape by introducing tokenized treasury bonds, marking a groundbreaking step towards a digital era in finance. Announced by the Bureau of the Treasury, the initiative aims to offer 10 billion pesos (approximately $179 million) in one-year tokenized bonds to institutional buyers.
These bonds, issued by state-owned institutions—Development Bank of the Philippines and Land Bank of the Philippines—will feature a minimum denomination of 10 million pesos and increments of 1 million pesos. Due in November 2024, the final interest rate will be unveiled on the issuance date, Bloomberg reports.
Deputy Treasurer Erwin Sta highlighted the ongoing exploration of technology’s potential, signaling a commitment to further delve into tokenized assets. This groundbreaking move replaces the planned bills auction, showcasing the nation’s embrace of modern financial technology to bolster its domestic debt market.
Tokenized bonds promise increased liquidity and transparency, heralding a pivotal moment in financial innovation. The Philippines’ shift to these tokens amid Asian governments’ rising interest in such markets is notable.
Earlier this year, Hong Kong issued $100 million in tokenized green bonds under its Green Bond Programme, leveraging Goldman Sachs’ protocol for one-year tokenized bonds.
The Philippines’ inaugural Tokenized Treasury Bonds (TTBs) will be available to eligible investors in denominations mirroring conventional government securities, issued digitally for accessibility and efficiency.
Moreover, the BTr will maintain tokens in a Distributed Ledger Technology (DLT) Registry, working in tandem with the National Registry of Scripless Securities (NRoSS) for streamlined processing. The NRoSS will serve as the primary registry, marking a significant leap towards a digitally transformed financial landscape in the Philippines.
The Philippines’ Bureau of the Treasury plans to finalize the one-year bond’s interest rate by Nov. 20, with the issuance and settlement scheduled for Nov. 22. As per an announcement on Thursday, it retains the option to modify the issue’s mechanics.
This move, alongside Hong Kong’s fintech endeavors, signals a noteworthy trend in Asia’s financial markets. These advancements showcase the region’s proactive stance in embracing advanced technologies and its commitment to staying on par with global financial counterparts.