The Evolution of Blockchain

in Bond Market
Group 5 – BFI61
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Trịnh Bùi
Hiền Hòa Phương Dung

Nguyễn Bùi Vũ Cao

Việt Phương Hải Khanh Bội Ngọc
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Blockchain Bond Blockchain The Bottom Line
Definition, origin A potential blockchain
and characteristics of solution design
Blockchain

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Traditional Bond Case Study
Get to know the The application of
traditional bond trading blockchain in bond
process market
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BLOCKCHAIN
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Concept
Characteristics
•AThe decentralised
blockchain databasea managed
is essentially digital
by multiple
ledger participants
of transactions is is
that known as
duplicated
Distributed Ledger
and distributed Technology
across the entire (DLT).
network of computer systems on the
•blockchain.
Almost impossible to change, hack,
or cheat the system. Blockchain
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02
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BOND
The traditional bond we all
know
 B What is bond?
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A bond is a fixed income

instrument that represents a
loan made by an investor to
a borrower (typically
corporate or governmental)
 B Bond Trading Process
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PRE-ISSUANCE POST-TRADE
The preparation of issuance, The actual issuance of the debt
choosing the modalities of the security in central securities
price discovery mechanism depositories (CSDs) and its
and striving agreements delivery to investors
between parties
 B Inefficiencies in pre-issuance process
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reconciliation syndicated
inefficiency data referencing issuance in EU
Lack of data Process of obtaining Limited potential No pan-European
room to store security identifiers bank contacts issuance platform
documents slows down the speed available
of trading
 B Inefficiencies in post-trade process
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● The lack of interoperability between

centralized database systems

● Risks from the need to reconcile information

between intermediaries

● Complicated and expensive payment chain

● Complex and cost-inefficient documentation

process
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BOND
BLOCKCHAIN
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Blockchain Bond Model
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HOW BLOCKCHAIN BENEFITS BONDS ISSUANCE
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documents can be stored documentation creation, deal
in the hashes on-chain structuring, price negotiation, better access to the
more digitally and and order transmission are lending pool and signific
verified only by the allowed to take place in the for market participants
authorized users on the same network
blockchain FOR PRE-ISSUANCE PROCESS

Eliminating physical Transparent and Broader access to

documentation standardized process the capital markets
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HOW BLOCKCHAIN BENEFITS BONDS ISSUANCE
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TOKENIZATION
advance multi-currency
settlement services and facilitate
SIMPLIFICATION cross-border transactions
FOR POST-TRADE PROCESS
reduce current operational,
systemic risks, and administrative
barriers linked to the manual and
TRANSPARENT
multi-step process
PROCESS
reducing intermediaries and
eliminate counterparty risk
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CASE STUDY
The application of blockchain in
bond market in the world
 B World Bank’s Bond-i
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World Bank issued a second
tranche of its blockchain
bond, raising an additional
A$50 million

2019, August
2018, August 2021, April
World Bank launched its European Investment Bank
bond-i, short for (EIB) has raised 100 million
"blockchain operated new euros from a two-year digital
debt instrument”, raised bond, registered in the public
A$110 million Ethereum blockchain
network
 B Thailand’s project of DLT Scripless Bond
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 B Government Official Announcement
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Bond receipt time
All stakeholders are Selling Agents, TSD, Bond Issuers can
reduced from 15 to 2
enabled to have and BOT can reduce monitor and manage
days. Individual
access to the same the complexity of bond sales in real
investors ca
information, their operational time, increasing
purchase bonds with
increasing efficiency processes (both in competition among
their full rights from
and transparency time and workloads). Selling Agents.
any Selling Agent.
 B Key Stakeholders and Their Roles
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 B Project Key Features
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Data integration and Real-time information

bookkeeping accessibility

Smart contracts & automation Reports and monitoring

 B Settlement Cycle Of Government Savings Bonds
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 B Bond Registration
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 B Settlement Cycle Of Government Savings Bonds
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THE
BOTTOM LINE
 B Recap on blockchain-based bonds
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� Elimination of
Incentivized ecosystem Emerging markets settlement risk
an ecosystem with better access for global real-time settlement,
distributed ownership and investors into emerging eliminating settlement risk
responsibility markets

Enhanced liquidity
Global accessibility Programmable rules
direct access to global instant secondary market Improved governance and
investors trading across various regulatory oversight
platforms
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Thanks!
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Do you have any questions?