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Philippines Will Sell Sovereign Bonds On Blockchain Using Its CBDC

The Treasury of the Philippines is open to working with Bangko Sentral to sell DLT-based sovereign bonds through the use of its CBDC.

by V. Sinclair
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In the Philippines, the Bureau of Treasury is thinking about working with the central bank to allow digital currency to be used for selling government securities.

After successfully raising 15 billion pesos ($271 million) through its first tokenized Treasury bonds using the Distributed Ledger Technology Registry, the Treasury is now investigating the potential of blockchain technology.

Utilizing CBDC to Market Sovereign Bonds
For major financial transactions, the Bangko Sentral ng Pilipinas has been experimenting with central bank digital currency (CBDC), with the goal of evaluating the benefits, hazards, and policy implications of this technology.

But only half of the bond sale procedure is currently covered by the distributed ledger technology (DLT) registry, which is in charge of identifying the securities’ registration location. On Monday, Deputy Treasurer Erwin Sta. Ana stated in a Bloomberg interview:

“We are evaluating the DLT’s capabilities. We would like to work together on the Bangko Sentral’s digital coin central bank initiative. Integration between the BSP’s CBDC and our DLT Registry is possible.

Making the Most of the Tokenization Trend
A growing industry that is getting more attention from businesses and governments alike is tokenization. The world’s first tokenized green bond issued by a government was accomplished by Hong Kong in February when it sold HK$800 million ($103 million) in inaugural digital green bonds via Goldman Sachs’ GS DAP platform.

Furthermore, according to projections from Citigroup, the tokenization market—which includes a variety of assets like bonds, real estate, and private equity—could grow to $5 trillion by 2030.

Sta. Ana went on to say that longer tenors might be included in future sales of tokenized Treasury bonds from the Philippines. “You start with the shorter end when introducing securities. We can investigate the interior of as the market and technology develop the curve and then somewhat longer tenors afterwards,” Ana remarked.

The recent tokenized Treasury bond deal that happened on Monday might encourage more businesses to look into doing similar deals. Last year, Union Bank of the Philippines created a first by offering digital bonds for sale and listing them on the country’s bond exchange. Manila is currently thinking about allowing retail investors to purchase tokenized bonds.

The retail sector is where we will see the majority of the effects of those reforms, so we are just getting started there, according to Sta. Ana.

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