World Bank issues first English Law DNN
24 October 2023 UK
Image: Maksim Kabakou/stock.adobe.com
The first Digitally Native Note (DNN) has been issued under English Law via Euroclear’s Digital Financial Market Infrastructure (D-FMI). This marks the launch of Euroclear’s digital ledger technology (DLT)-powered Digital Securities Issuance (D-SI) service.
The €100 million DNN was issued by the World Bank — International Bank for Reconstruction and Development (IBRD) to support its sustainable development activities, and was listed on the Luxembourg Stock Exchange. Citi Issuer Services served as issuing and paying agent, TD Securities as dealer and Euroclear Bank as issuer central securities depository. Corda, R3’s DLT platform, underpinned the issuance.
Euroclear’s D-FMI is connected to the firm’s traditional settlement platform for secondary market operations on the DNN, allowing investors to access trading venues and liquidity management facilities. It enables the creation and settlement of DNNs on a T+0 basis, which Citi says is a step towards a fully digital end-to-end transaction lifecycle for bonds.
As part of a multi-year collaborative programme to establish a sustainable digital infrastructure for DNN issuance, this project offers a scalable model illustrating the benefits of blockchain technology within existing capital markets architecture. Existing bond accessibility and liquidity is maintained, with the benefits of digitisation having the potential to improve efficiency and growth opportunities for debt capital market participants.
Lieve Mostrey, CEO of Euroclear Group, says: "Our collaborations with Citi, TD Securities and the IBRD have been instrumental in the launch of this major innovation in asset issuance. The integration of our distributed ledger technology capabilities marks a significant milestone in the digital transformation of our global financial markets.
“Today's announcement represents a stride towards realising the potential of digital assets, underpinned by our shared commitment to pioneering innovation and delivering transformative solutions for investors and issuers on a global scale."
Jorge Familiar, vice president and treasurer at the World Bank, comments: “Since the World Bank’s first blockchain bond ‘bond-i’, debt capital markets have been moving towards digitisation, step-by-step.”
The €100 million DNN was issued by the World Bank — International Bank for Reconstruction and Development (IBRD) to support its sustainable development activities, and was listed on the Luxembourg Stock Exchange. Citi Issuer Services served as issuing and paying agent, TD Securities as dealer and Euroclear Bank as issuer central securities depository. Corda, R3’s DLT platform, underpinned the issuance.
Euroclear’s D-FMI is connected to the firm’s traditional settlement platform for secondary market operations on the DNN, allowing investors to access trading venues and liquidity management facilities. It enables the creation and settlement of DNNs on a T+0 basis, which Citi says is a step towards a fully digital end-to-end transaction lifecycle for bonds.
As part of a multi-year collaborative programme to establish a sustainable digital infrastructure for DNN issuance, this project offers a scalable model illustrating the benefits of blockchain technology within existing capital markets architecture. Existing bond accessibility and liquidity is maintained, with the benefits of digitisation having the potential to improve efficiency and growth opportunities for debt capital market participants.
Lieve Mostrey, CEO of Euroclear Group, says: "Our collaborations with Citi, TD Securities and the IBRD have been instrumental in the launch of this major innovation in asset issuance. The integration of our distributed ledger technology capabilities marks a significant milestone in the digital transformation of our global financial markets.
“Today's announcement represents a stride towards realising the potential of digital assets, underpinned by our shared commitment to pioneering innovation and delivering transformative solutions for investors and issuers on a global scale."
Jorge Familiar, vice president and treasurer at the World Bank, comments: “Since the World Bank’s first blockchain bond ‘bond-i’, debt capital markets have been moving towards digitisation, step-by-step.”
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