Union Bank of the Philippines (UnionBank) has partnered with Standard Chartered to complete a proof of concept for retail bonds leveraging blockchain.
The 3 and 5.25-year dual tranche issuance totalling PHP9bn by UnionBank was successfully mirrored on the platform co-created by UnionBank and SC Ventures. Orders received are tokenised and not allocated directly to investors, to stay within guidelines. SC Ventures also built the bond tokenisation platform making the process simpler and faster.
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In addition, the success of the proof of concept will open up a host of possibilities around solving for liquidity and transparency in the retail bond markets.
The marriage of a digital order taking platform and backend infrastructure driven by tokens is the future of retail bonds. We are keen to see the day when investors can buy and sell bonds, even on the secondary markets at a click of a button on their phones,” said UnionBank Executive Vice President and Chief Finance Officer Jose Emmanuel Hilado. “This proof of concept begins the journey of the democratization of bonds as an investment destination which supports the UN Sustainable Development Goals of the United Nations.”
“We co-created the solution with UnionBank with the aim of providing retail investors with a trusted and transparent platform to gain direct access to bonds. Today marks a milestone as we shape the retail bond infrastructure of tomorrow,” said Alex Manson of SC Ventures.
“The bond infrastructure around the world has been designed primarily for institutional investors and involves a number of intermediaries to buy and subsequently trade bonds, making it less accessible to retail investors. To an average investor, providing direct access to issuers is critical in allowing them to reap the full benefits of their investment,” explained Aaron Gwak, SCB head of capital markets, ASEAN.
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By GlobalDataThe Online Bond Reservation portal of UnionBank is where the blockchain bonds are available and is the Philippines’ first digitally-enabled platform allowing clients to view and place order reservations for corporate bond offerings.
