Philippines has become one of the first countries in the world to sell tokenized bonds on a distributed ledger, raising $270 million.
“The Bureau of the Treasury (BTr) saw strong demand from qualified institutional investors for the Republic’s first-ever Tokenized Treasury Bonds (TTBs), with the size of the book reaching P31.426 billion ($560 million), more than three times the target issue size of P10 billion ($180 million),” the Treasury said, adding:
“This allowed the BTr to upsize the issue to P15 billion at 6.50%, aligned with the prevailing 1-year secondary market rates despite the non-tradability of the TTBs.”
The offering in this pilot project was limited to institutional investors, but the central bank Governor Eli M. Remolona says it may be expanded to the wider public.
“Right now, the focus is on institutional investors but hopefully, we can expand this project to retail investors over time.”
The Distributed Ledger Technology Registry used is a “blockchain-based registry, owned by the BTr,” the Treasury said.
It is provided by the Philippine Digital Asset Exchange (“PDAX”), a regulated crypto exchange that sells bitcoin, eth and other tokens.
Accounts can be viewed by just downloading the app, but little further information was provided about this blockchain. We asked the exchange for details, and will update if there’s a response.
As a pilot project, the sale had limitations compared to a public blockchain. Account details were duplicated to their usual centralized registry, which is the ultimate arbiter of ownership and the token can’t be transferred. Pending on details, accounts potentially can’t even be viewed publicly either.
It is however a step in trying new technology in a very controlled environment. As the sale was successful, the Treasury may well try and go more crypto native.
“The success of this issuance will go a long way towards advancing our efforts in the digitalization space,” said the Finance Secretary Benjamin E. Diokno.