Euroclear has entered the digital securities arena by launching a digital securities issuance service. This newly unveiled service marked a pivotal move for the Brussels-based clearing house, which aims to advance its digital infrastructure strategy. The first successful application of this service was the settlement of €100 million (approximately $106 million) worth of digital World Bank bonds. The three-year bond, referred to as a digitally native note, was issued by the International Bank for Reconstruction and Development, a branch of the World Bank responsible for raising sustainable development financing. The bond was listed on the Luxembourg Stock Exchange, and the entire operation was finalized on October 23.
Euroclear's digital infrastructure is designed to connect with its pre-existing platform for secondary operations while complying with the EU Central Securities Depository Regulation. This novel system operates using R3's Corda blockchain technology. According to Anshula Kant, the Managing Director and Chief Financial Officer of the World Bank Group, this initiative reflects the ongoing digital transformation within capital markets. He noted that Euroclear's new services provide issuers and investors with the opportunity to progress further in this digital evolution.
The digital offering adheres to English law, with Citi Distribution Services Inc. serving as the offering and paying agent, and TD Securities acting as the offering agent. Euroclear, as one of the world's largest securities clearing companies, joins a growing list of entities venturing into the realm of digital securities. The World Bank was one of the pioneers, issuing the world's first digital bond back in 2018. Throughout this year, Hong Kong launched digital bonds denominated in Hong Kong dollars and yuan. In June, the Luxembourg Stock Exchange registered the first digital bond in Swedish krona. In a similar vein, the Tel Aviv Stock Exchange executed a proof-of-concept for bond tokenization in June. Additionally, another major settlement company, DTCC, recently acquired digital infrastructure developer Securrency, aiming to position itself at the forefront of unlocking the potential of digital assets.
