PH to start selling tokenized Treasury bonds

MANILA  -The Philippines announced Thursday its plan to raise at least P10 billion in fresh debt at its first ever “tokenized” Treasury bonds sale next week, joining other Asian countries in harnessing the power of blockchain technology to diversify its debt offering options.

The Bureau of the Treasury (BTr) will offer one-year, peso-denominated tokenized T-bonds on Nov 20, with the issue date scheduled for Nov 22. The BTr canceled the weekly auction of Treasury bills set on the same day to accommodate the new offering.

The government will offer the tokenized bonds to institutional investors, with the minimum investment set at P10 million, which can be increased in increments of P1 million.

The new issuance would make the Philippines among the countries that have included tokenized bonds in their choices of debt offerings. In February, Hong Kong raised $800 million Hong Kong dollars during its maiden sale of tokenized green bonds.

Tokenized bonds are exchanged digitally through a blockchain. According to the BTr, the debt securities will be sold in the form of “digital tokens” that will be maintained in the bureau’s Distributed Ledger Technology (DLT).

While other well-known use of blockchain technology like cryptocurrencies was met with caution, the tokenization of real assets like debt and equity instruments is seen as a huge step in democratizing financial markets.

The BTr earlier said that if the pilot offer to institutional creditors ends up successfully, it may also tokenize retail Treasury bonds to attract small creditors.

The BTr hired state-owned banks Land Bank of the Philippines and Development Bank of the Philippines as issue managers. The bureau said it reserves the right to revise the timetable and other mechanics of the offer before the start of book building.