Belgium-based bank Euroclear has launched the first digital native security on the Luxembourg Stock Exchange together with the World Bank.
The €100 million digital bond – Digitally Native Notes (DNN) – issuance by the World Bank involves the distribution and settlement of fully digital financial assets through distributed ledgers, a company press release noted.
Throughout the issuance of digital securities through blockchain, Citi Group’s Issuer Services acted as the agent for issuance and payments and Canadian investment bank TD Securities acted as the dealer.
“The integration of DLT in asset issuance is a critical step forward in the evolution of our ecosystem’s digital capabilities, as we continue to deliver on our goal of becoming a fully digital and data-enabled Financial Market Infrastructure,” said Lieve Mostrey, CEO of the Euroclear group.
Last year, the Luxembourg Stock Exchange became the first in Europe to admit three digital securities issued by Société Générale, followed by the European Investment Bank.
Per the announcement, R3’s Corda blockchain served as the platform for this digital bond issuance, proving the trust in the nascent tech.
The primary objective of the issuance is to establish a scalable framework, combining the advantages of digitization with bond accessibility and liquidity. “Recognizing the potential of DLT to transform global capital markets, the launch will support the expansion of digital capabilities in the post-trade space,” the announcement read.
Additionally, it also has the potential to transform how debt capital markets operate, and shows the continued value of the international issuance model, says Andrew Mulley, EMEA Head of Citi’s Issuer Services.
The developments also encompass Citi’s various offerings including digital currencies, trade securities, custody services and asset servicing.
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