A growing number of banks are experimenting with issuing bonds on blockchains, in a shift they say could eventually revolutionise an asset class that has lagged behind in adoption of new technologies.
“I think blockchain has a real future in debt capital markets,” said Sean Taor, head of European debt capital markets at RBC. “If you can use blockchain from start to finish, you take out a lot of the costs, a lot of the risks in terms of counterparty and settlement risks.” In April the European Investment Bank raised €100m from a two-year bond registered on the ethereum blockchain network, in the first such deal involving a syndicate of banks. The deal came three years after the World Bank sold the first bond to be created and managed using blockchain.
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