The tokenized commercial bond is one of the earliest transactions of its kind in the budding sector of onchain debt and credit instruments.
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Financial services company J.P. Morgan announced on Thursday that it arranged a $50 million onchain US commercial paper issuance for Galaxy Digital Holdings on the Solana blockchain, one of the earliest debt deals executed on a public network in the United States.
The offering, a tokenized short-term corporate bond, was tokenized by J.P. Morgan. to the company, it created the for the bond and handled the settlement of the primary issuance.
The tokenized securities were sold to asset manager Franklin Templeton and crypto exchange Coinbase, while issuance and redemption will be paid in Circle’s USDC () dollar-pegged stablecoin, according to the press release.
“We’re putting into practice the model we’ve long believed in: open, programmable infrastructure that supports institutional-grade financial products,” Jason Urban, the global head of trading at Galaxy, said.
Tokenizing commercial, sovereign and municipal bonds can lower costs and settlement times by from the issuance and clearing process. Analysts forecast that the sector could capitalization by 2030.
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Hong Kong’s Monetary Authority (HKMA) has prioritized the tokenization of financial assets, to bring bonds and physical assets onchain by 2030.
Bringing real-world assets onchain makes cross-border settlement more efficient and positions Hong Kong for the integration of artificial intelligence into the financial system, to the HKMA.
In November, Hua Xia Bank, a publicly traded financial services company with ties to China’s central government, , equivalent to $600 million.
The bond tranche was issued by Hua Xia Financial Leasing, featured a 1.84% yield, and is settled exclusively in .
The digital yuan, also known as the digital renminbi, is a central bank digital currency (CBDC) issued by China’s government, which began developing it in 2014.
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