Internet Bond

Definition ∞ An internet bond is a digital financial instrument representing a debt obligation, issued and managed entirely on a distributed ledger technology, typically a blockchain. Unlike traditional bonds, these assets leverage smart contracts for automated coupon payments, principal repayment, and other bond covenants. They aim to reduce intermediaries, increase transparency, and lower issuance costs. The digital nature allows for fractional ownership and faster settlement.
Context ∞ Internet bonds are a significant topic in the tokenization of real-world assets and the evolution of capital markets within the digital economy. News often covers pilot programs and regulatory discussions surrounding the legal recognition and trading of these digital debt instruments. The relevance to digital economics involves the potential for increased market accessibility for both issuers and investors, as well as the efficiency gains derived from automated, on-chain processes.