Bank of Canada pilot issues country’s first tokenized bond
Canada has completed a pilot project testing blockchain technology in bond markets, resulting in the issuance of the country’s first tokenized bond, the Bank of Canada said Friday.
The project, called Project Samara, brought together the central bank, Export Development Canada, Royal Bank of Canada and TD Bank Group to test whether distributed ledger technology could make bond issuance, trading and settlement more efficient.
As part of the pilot, Export Development Canada issued a 100 million Canadian dollar ($73.6 million) bond with a maturity of less than three months to a limited group of investors. The bond was issued, traded and settled on a distributed ledger platform.
Payments were processed using wholesale central bank deposits instead of commercial bank money.
The platform, built on Hyperledger Fabric, allowed participants to manage the full lifecycle of the bond, including issuance, bidding, coupon payments, redemption and secondary trading. Separate ledgers for cash and bonds enabled near-instant settlement.
Researchers said the pilot showed that distributed ledger systems could improve settlement efficiency and reduce counterparty risk, although regulatory, governance and integration challenges remain.
Governments and financial institutions worldwide are increasingly testing tokenized bonds as part of broader efforts to modernize financial market infrastructure.
Featured image from: cointelegraph.com