Singapore-based DBS bank has released a digital bond through blockchain-based security tokens. DBS Bank operates as the sole bookrunner for the S$15 million bonds, which converts to about $11.3 million. The maturity period of a digital bond is six months. Its coupon rate is 0.6% per annum.
Furthermore, it has been disclosed that the bond is marketable on the DBS Digital Exchange, an exchange for digital assets that the bank introduced last year. Moreover, the exchange is not open to the public yet. It runs on a membership basis and only offers services to institutional and certified investors.
The bond will be exchanged in lots of S$10,000, which are considerably smaller than the S$250,000 standard lot size when it comes to wholesale bonds. As per DBS global head of fixed income Clifford Lee, the smaller lot sizes are feasible because of the bond’s issuance on the digital exchange.
Additionally, a security token platform, the DBS Digital Exchange also includes a cryptocurrency exchange and crypto-asset custody services. Presently, the exchange lists Bitcoin, Ethereum, XRP, and Bitcoin Cash.
Mainstream financial players are becoming progressively involved with blockchain technology, thanks to its possible efficiency and transparency advantages in April. The European Investment Bank published a €100 million bond on the public Ethereum blockchain in collaboration with Goldman Sachs, Santander, and Societe Generale.