Bond issuance describes the process by which entities such as governments or corporations raise capital by selling debt instruments to investors. These instruments represent a loan made by the investor to the issuer, with a promise of future interest payments and repayment of the principal amount. In digital finance, this concept extends to the creation of tokenized bonds on blockchain platforms. This method offers new avenues for capital formation and liquidity.
Context
The tokenization of traditional financial assets, including bonds, is a developing area within digital economics. This approach aims to enhance efficiency, reduce costs, and broaden investor access by leveraging blockchain technology. Regulatory frameworks for digital bond issuance are still evolving, posing questions regarding investor protections and market supervision. The acceptance of these digital debt instruments could significantly alter conventional capital markets.
The Digital Debt Service leverages a private DLT to execute near real-time Delivery-versus-Payment (DvP) settlement for municipal debt, significantly compressing the issuance lifecycle and eliminating intermediary costs for public finance entities.
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