Philippine Plans to Sell Government Bonds Using Blockchain and CBDC

Philippine Plans to Sell Government Bonds Using Blockchain and CBDC

SecuritiesCBDC

By Miles

21 Nov 2023

2 min read

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Philippines explores blockchain for bond sales; BSP tests digital currency, eyeing $5 trillion market potential.

The Philippines' Treasury is considering collaborating with the central bank to sell government bonds using digital currency. They are interested in blockchain technology after raising 15 billion pesos ($271 million) through tokenized bonds.

The Bangko Sentral ng Pilipinas (BSP) is testing central bank digital currency (CBDC) for large financial transactions. They want to understand the technology's advantages and disadvantages. The current method for these bonds only does half the job. "We're testing the DLT," said Deputy Treasurer Erwin Sta. Ana. We hope to collaborate with the BSP's CBDC initiative."

Tokenization, or the conversion of assets into digital tokens, is gaining popularity worldwide. Hong Kong recently auctioned the world's first tokenized government green bond. 

Citigroup believes that this market, which includes bonds and other assets, might reach $5 trillion by 2030.

Future Philippine tokenized bond sales may include longer-term bonds, Sta. Ana noted. They began with short-term bonds but hope to offer longer ones as technology and the market evolve.

The recent tokenized bond offering in the Philippines may motivate additional corporations to do this. Union Bank of the Philippines issued digital bonds last year. Manila now wishes to make these bonds available to the general public . "We're just getting started," Sta. Ana continued, "and we'll look to expand this to retail investors.”

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