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Beijing-based Asian Infrastructure Investment Bank (AIIB) has raised $300 million in its first bond issuance using blockchain technology from Euroclear, the same blockchain platform used by the World Bank.

The AAA-rated note offers a coupon of 4% and matures in January 2027. It was issued on Euroclear’s distributed ledger (DLT) platform. This is the first time an Asia-based institution has used this blockchain-enabled system for bond issuance, and the first US dollar-denominated digital bond on the platform.

Citigroup Inc. and BMO Capital Markets played key roles in the transaction, with Citi handling the distribution and settlement processes between the issuer and investors. BMO Capital Markets served as co-dealer alongside Citi, which also served as the issuing and paying agent.

AIIB Treasurer Domenico Nardelli said the bank will evaluate demand in the secondary market before considering further digital bond sales in the coming year. This cautious approach reflects the nascent but growing nature of digital bonds in the fixed income market.

AIIB’s successful issuance follows in the footsteps of other major institutions exploring blockchain-based bond offerings. Notable examples include the World Bank and the European Investment Bank, both of which have conducted similar digital bond sales in recent years.

This development marks a significant milestone in the integration of blockchain technology into traditional financial markets. By using distributed ledger technology, institutions like AIIB can potentially increase transparency, reduce operational risk and improve the efficiency of bond issuance and trading processes. As more institutions embrace blockchain-based technologies, such developments could lead to broader changes in the way global fixed income markets operate.

Crypto Briefing recently highlighted the growing adoption of tokenized funds, driven by government bond investments, highlighting the increasing efficiency in asset investments.

For example, Citi, Mastercard and JPMorgan recently experimented with tokenizing a private equity fund via a shared ledger for asset settlement, and saw dramatic improvements in automation and data standardization in traditional financial models.

On the bond front, Metaplanet Inc., a Japanese company, recently announced plans to buy $6.3 million worth of Bitcoin Through a bond issue, which causes the share price to rise significantly.

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