Monday, April 15, 2024

PH gov’t issues Tokenized Treasury Bonds via PDAX

Philippine cryptocurrency exchange PDAX has announced its involvement with the Bureau of the Treasury of the Philippines (BTR), Landbank of the Philippines, and the Development Bank of the Philippines (DBP) enabling the government to issue its first-ever Tokenized Treasury Bonds (TTBs).

The bonds were offered to institutional investors and were priced at a coupon of 6.5% per annum. Bids totaled P31.426 billion, more than triple the initial offer size of P10 billion.

“PDAX is honored to be the BTR’s technology partner in the introduction of TTBs in the country. Offering these bonds to institutional investors serves as the first step to a more seamless trading and settlement experience for government securities in the Philippine financial markets,” said PDAX chief executive Nichel Gaba.

“Through greater use of blockchain technology, many risks such can be eliminated, deepening liquidity in the capital markets”

The collaboration signals a noteworthy advancement in the Philippine cryptocurrency sector, aligning the country with others such as Singapore and Hong Kong in leveraging tokenized bonds to enhance transparency and interoperability, while concurrently reducing size and liquidity requirements through lower transaction costs.

While the maiden Tokenized Treasury Bonds are only made available to qualified institutional buyers through the DBP and Landbank, retail investors can access other treasury bills on the PDAX app. Bonds on PDAX eliminate the need for physical visits to a financial institution’s office.

For as low as P500, investors can access low-risk instruments backed by the full faith and credit of the Philippine government. The tokenized T-Bills available provide a yield of around 6.2% and have a maturity of 91 days.

During the Bureau of the Treasury’s 126th anniversary event, it was announced that the BTR awarded P15 billion of the maiden tokenized treasury bonds.

The Bureau of Treasury plaque recognizing the partnership between PDAX and the bureau for the launch of the Tokenized Treasury Bonds

“The issuance of TTBs is part of the government securities digitalization roadmap which aims to promote financial inclusion and deepen market liquidity,” shared deputy Treasurer of the Philippines Erwin Sta. Ana.

“In the future, we envision these (TTBs) to be a security that our retail investors can acquire in denominations that are even lower than our existing retail products. In addition, we envision market participants to be able to trade these securities among themselves and to be able to settle their transactions in real-time. Turning this vision into reality, however, will require us to build the infrastructure that will enable it incrementally. Today, we take the first step in this journey,” he added. 

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