Companies bank on blockchain bonds to cut costs, time

Author: Amélie Labbé | Published: 26 Sep 2017

A number of companies are eyeing blockchain-backed bonds to cut the time and costs associated with debt issuances. But the technology could also ultimately remove the need for bank intermediaries once it standardises, opening the market wide open for smaller issuers.

France’s BNP Paribas, the National Bank of Kazakhstan, the World Bank and German automobile group Daimler have all recently announced initiatives and programmes to sell blockchain-based securities.

The idea behind using a digital platform to issue and manage bonds is to automate as much as possible their entire lifecycle. The entire transaction — from the origination, distribution, allocation and execution of the issuance to the confirmation of repayment and of interest payments — is to be carried out via blockchain technology exclusively. The origination, settlement and trading are carried out within a single function.

"The blockchain takes out...