The Philippines is set to sell tokenized treasury bonds for the first time, in a significant milestone for its financial markets.
The Bureau of the Treasury has announced that it will offer at least 10 billion pesos ($179 million) worth of one-year tokenized bonds on Monday, marking a shift towards exploring blockchain technology and tokenized securities to enhance the country's domestic debt market.
To issue the new tokenized bonds, the regular bills auction initially scheduled for the same day has been canceled. The government has indicated that the issue size may be subject to change as necessary.
The tokenized bond, which is due in November 2024, will be offered to institutional buyers with minimum denominations of 10 million pesos and increments of 1 million pesos. The final interest rate will be determined through a book-building process and subsequently announced on November 20.
The Development Bank of the Philippines and the Land Bank of the Philippines, both state-owned institutions, will serve as the issue managers.
Deputy Treasurer Erwin Sta. Ana expressed the government's commitment to exploring this innovative technology, stating, "We will continue to study the technology and test how far we can take it."
The move to embrace distributed ledger technology (DLT) and tokenized securities has gained traction globally. Last month, Euroclear successfully settled a digital World Bank bond for €100 million ($106 million). Meanwhile, Citi expanded its digital assets offering by partnering with BondbloX to offer tokenized bond trading.