Union Bank of the Philippines (UBP) issued innovative blockchain-based peso bonds, helping the Philippines raise about $209 million.
Philippine banking giant Union Bank of the Philippines (UBP) raised 11 billion pesos ($209 million) after issuing digital local currency bonds, the country’s first debt securities based on distributed ledger technology (DLT). This was reported by the local media.
The digital bonds were issued through Philippine Depository & Trust Corp.’s (PDTC) digital registry and vault using an infrastructure based on an open-source platform developed by Singapore-based fintech company Hashstacs Pte Ltd (STACS). The bookrunners and coordinators of the bond issue were Hongkong & Shanghai Banking Corporation, the world’s largest financial conglomerate, and Standard Chartered PLC, a British multinational financial corporation, which also became the selling agents for the offering.
The new digital bond infrastructure remains compatible with the traditional trading infrastructure. Thus, peso-based bonds are available for trading on the Philippine Dealing & Exchange Corp. (PDEx) fixed-income exchange. The bonds mature in one and a half years with a fixed annual rate of 3.25%.
Union Bank expected to raise at least 1 billion in a digital peso bond offering. However, the amount of actual investment exceeded expectations by a factor of 11 and amounted to 11 billion, which is about $209 million.
Union Bank Executive Vice President and Chief Financial Officer Jose Emmanuel Hilado expressed confidence that the bank’s initiative and innovative approach to issuing bonds based on distributed ledger technology (DLT) will be a big step “on Union Bank’s journey to embrace digitization and positive disruption in the industry.” He said he hoped that the bank’s digital initiative would be recognized in the global community and could change international financial relations.
To recap, Brazil recently launched a blockchain-based government network to control government spending and fight corruption, and India is using blockchain technology to monitor securities.
