The Philippines completed the sale of $270 million in its maiden tokenized treasury bonds.
What Happened: The Bureau of the Treasury originally planned to sell $179 million in Tokenized Treasury Bonds (TTBs). However, the bids for the TTBs peaked at 31.426 billion Pesos making it oversubscribed by three times from the 10 billion Pesos minimum offer, according to a Bloomberg report.
The government sold 15 billion Pesos. The bonds are due in November 2024 and carry a 6.5% coupon rate.
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Digital tokens will be used to issue the bonds. They will be maintained on a blockchain-based registry, the Distributed Ledger Technology (DLT) Registry which is owned by the Treasury Bureau. The DLT Registry will be run in parallel with the National Registry of Scripless Securities or NRoSS.
Philippine Digital Asset Exchange, licensed and regulated by the country’s central bank, will be the technology provider for the digital bond registry.
Why It Matters: The reaction to the bond issuance highlights institutional investors’ confidence in peso-denominated tokenized assets.
It promotes the effectiveness of the government’s diversification strategy. Government officials believe that bonds will be offered to retail buyers over a period.
The Treasury adds that the issuance of bonds, a part of the government securities digitalization plan, will provide the “proof of concept” for the wider use of DLT in the government bond market.
Tokenization assists in the trading of illiquid assets which thereby enhances the buyers’ pool and improves price discovery. Citigroup forecasts the tokenization market to expand to $5 trillion by 2030 covering assets like bonds, property, and private equity.
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