In a significant stride toward digitalization in the financial world, Belgium-based bank Euroclear, in collaboration with the World Bank, has introduced the first-ever digital native security on the Luxembourg Stock Exchange. This groundbreaking initiative, known as Digitally Native Notes (DNN), involves the issuance, distribution, and settlement of fully digital financial assets via distributed ledgers.
The €100 million digital bond issuance represents a pivotal moment in financial markets, with the integration of Distributed Ledger Technology (DLT) into asset issuance. Euroclear, alongside partners like Citi Group's Issuer Services and Canadian investment bank TD Securities, is spearheading this transformation.
Lieve Mostrey, CEO of the Euroclear group, emphasized, "The integration of DLT in asset issuance is a critical step forward in the evolution of our ecosystem's digital capabilities, as we continue to deliver on our goal of becoming a fully digital and data-enabled Financial Market Infrastructure."
The underlying technology powering this digital bond issuance is R3's Corda blockchain, which has proven its reliability in this nascent but promising sector. The initiative's primary goal is to establish a scalable framework that combines the benefits of digitization with bond accessibility and liquidity.
Andrew Mulley, EMEA Head of Citi's Issuer Services, noted that this venture recognizes the potential of DLT to transform global capital markets and expand digital capabilities in the post-trade space. Moreover, it has the potential to revolutionize the functioning of debt capital markets and underscores the continued importance of the international issuance model.