Debt issuance is the process by which entities, such as corporations or governments, raise capital by selling debt instruments to investors. These instruments represent a loan that must be repaid with interest over a specified period. In traditional finance, this involves bonds, notes, or bills.
Context
The concept of debt issuance is expanding into the digital asset space with the emergence of tokenized bonds and other debt instruments on blockchain networks. News sometimes covers pilot programs or actual issuances of digital bonds by financial institutions or sovereign entities. These developments point towards a future where debt markets may operate with greater efficiency and transparency through distributed ledger technology.
A major bank deploys a shared ledger for commercial paper, eliminating settlement latency and reducing counterparty risk in the short-term debt market.
Integrating a DLT-based trading venue for digital bonds enables immediate secondary market liquidity, de-risking tokenized asset adoption for institutional capital.
Siemens leverages a private permissioned blockchain and central bank digital ledger for a €300 million bond, achieving near-real-time settlement and significantly reducing capital market operational friction.
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