BondEvalue and Northern Trust collaborate to complete world’s first blockchain-based bond trade
Northern Trust and BondEvalue have completed the first trade of a fractionalized blockchain-based bond.
The trade of a blockchain-based bond, known as BondbloX, was executed on BondEvalue’s platform with Northern Trust as the exclusive asset servicing provider. This comes after the two parties established a strategic partnership in November 2019 to deliver integrated asset servicing and digital solutions for fractional ownership of fixed income bonds operating from the Monetary Authority of Singapore’s Sandbox Express.
BondEvalue’s platform combines the power of distributed ledger technology (DLT) to enable enhanced transparency, liquidity and faster settlement, while making institutional grade investment opportunities available to new classes of investors.
Northern Trust is providing securities services for the wholesale bonds and will support receipt of investments and payments of redemptions for the platform in a wide array of currencies. In what is believed to be a first for the industry, Northern Trust has built the market leading capability to communicate cash & securities settlement reporting directly to BondEvalue’s DLT platform via an application programming interface (API).
Justin Chapman, global head of Market Advocacy & Innovation Research at Northern Trust, says: “Digital assets bring significant benefits to both the end investor and all participants within the value chain as they improve trust and liquidity within market segments as a result of the immutable record. An additional benefit of fractionalised ownership of digital assets is the ability to open up institutional bond markets to more investor types – this is a positive step forward for broadening financial inclusion.”
Yen Leng Ong, country executive for Southeast Asia at Northern Trust, says: "Singapore continues to be a significant market for deploying DLT in the financial services system. The fintech regulatory sandbox environment has enabled Northern Trust to work collaboratively with BondEvalue to the benefit of investors and the wider capital markets ecosystem.”
Rahul Banerjee, founder, BondEvalue, says: “This milestone represents a significant step towards making institutional grade bonds more widely accessible to certain investors. Our platform is greatly assisted by Northern Trust, who not only brings the confidence of safe keeping and settlement, but advanced understanding of the transformative potential of DLT.”