Retail investors will now have direct access to bonds as Union Bank and Standard Chartered Bank successfully co-created a digital platform that leverages blockchain to tokenize them.
“We have developed a blockchain platform that can be adapted in or sold to other countries,” UnionBank president Edwin Bautista said Wednesday.
“We can be a lead player here,” he stressed.
Complying within prevailing retail bond guidelines, tokens are not directly allocated to investors, but mirroring traditional transactions.
The portal is touted as a “proof of concept” that can decentralize ledgers which then democratizes retail bond offerings.
UnionBank clients can now experience a fully digital end-to-end service, reducing paperless processing time for purchasing bonds within minutes.
“This proof of concept begins the journey of democratization of bonds as an investment destination, which supports the Sustainable Development Goals of the United Nations,” UnionBank executive vice president and chief finance officer Jose Emmanuel Hilado said.
Bonds are traditionally less accessible to retail investors, due to an infrastructure designed primarily for institutional investors, involving a soup line of go-betweens to purchase and trade bonds.
The platform provides a direct access to issuers, while average investors can get the full benefits of their investments.
With the platform, UnionBank has already sold about P9 billion worth of three- and 5.25-year bonds.
With this development, UnionBank is optimistic that future investors will be able to purchase and sell bonds, even on secondary markets, with the convenience of just clicking a button on their phones.