R3‘s enterprise distributed ledger technology (DLT) platform, Corda, has played a pivotal role in the issuance of the first live digital bond by Euroclear’s International Central Securities Depository (ICSD). This significant milestone represents a major stride in Euroclear’s ongoing Digital Financial Market Infrastructure (D-FMI) initiative, focusing on enhancing transparency, speed, and resilience in the bond issuance process.
The issuance, carried out under UK law, involved a Supranational, Sovereign, and Agency (SSA) bond by the World Bank, with Citi acting as the issuer agent and TD Securities as the dealer. The process was successfully completed on October 23rd, marking a historic moment for the financial market.
R3’s Corda platform was chosen for its unique distributed architecture, enabling it to support the issuance and primary distribution phase of a bond’s lifecycle within the existing legal framework applicable to an ICSD. This achievement demonstrates Corda’s capabilities and its potential to transform capital markets and foster innovation in the industry.
Antonio Queiroz, Chief Digital Officer at Euroclear, expressed his excitement about the successful collaboration, stating, “Through working with our extensive global ecosystem, we have achieved a major milestone in both our DFMI initiative and the evolution of securities trading as a whole. As a financial market infrastructure with a track record of providing high-quality settlement services to the world’s leading financial institutions, we are excited to continue building on our partnerships to drive digital transformation in the industry and to improve transparency and efficiency across capital markets as a whole.”
David E. Rutter, CEO, and Founder of R3, emphasized the significance of the issuance, highlighting that it is not a mere sandbox or proof of concept project but a live market issuance. He stated, “This issuance is not a sandbox or proof of concept project – it is a live market issuance and it demonstrates the role DLT can play in transforming capital markets. FMIs such as Euroclear play a critical role in the financial ecosystem. We’re working with them and central banks in areas such as securities settlement to improve how we communicate and exchange value, ultimately to deliver a better, more efficient, open, trusted, and enduring digital economy. This is about bringing participants and ecosystems together to modernize mission-critical processes in the capital markets industry. Corda is emerging as the technology of choice because it was designed for regulated markets from the ground-up, ensuring resiliency, governance, scalability, and security.”
The successful issuance of this digital bond underscores the growing influence of blockchain technology in reshaping traditional financial systems. With Corda at the forefront, this collaboration heralds a new era in the digitization of securities trading, setting a precedent for future innovations in the global financial landscape.
Read more about Euroclear’s launch of a DLT solution here.