Toyota Leasing (Thailand) became the first company to issue a corporate bond using the Thai Bond Market Association’s blockchain platform. The network operates under the Securities and Exchange Commission’s (SEC) regulatory sandbox and is supported by the Bank of Thailand.
Last month, Toyota, a unit of Toyota Motor Thailand, issued the 500 million baht ($16.4 million) bond to institutional investors and high net-worth individuals, a Bangkok Post report said. Bangkok Bank is the underwriter for the bond and Bank of Ayudhya represented the debenture holder for the pilot project.
A few months ago, Ledger Insights reported on the Thailand Bond Market Association’s (TBMA) announcement to adopt blockchain for bond registration and tokenize bonds for faster settlement. At present, banks and securities traders act as bond registrars. However, with blockchain, ownership is recorded in a shared place so these firms can see holdings in real-time and expedite the process of bond transactions to three days from 15 days.
Chuenkamol Boobphakam, Managing Officer and CFO at Toyota Leasing told Bangkok Post that blockchain will help the company via real-time notification of bondholders, resulting in transaction efficiency and easing the issuance process in the primary bond market.
It was first revealed that the TBMA was exploring blockchain for corporate bonds about two years ago. The system is being rolled out in three phases, with bond registration as the first phase of the project.
The second phase is servicing bond deposits, which will inform bondholders about future coupon payments. And the final step is the ‘Bond Coin’ for a clearing and settlement system.
Meanwhile, Thailand is actively exploring blockchain applications for businesses as well as governance. A few months ago, the Ministry of Finance announced three blockchain projects — blockchain VAT refunds, government e-procurement and government bond issuance.
Among similar initiatives elsewhere, the Bank of China (BoC) has issued about 20 billion yuan ($2.8 billion) worth of bonds using its proprietary blockchain system. In Japan, Nomura Research Institute (NRI) and Nomura Holdings are developing a blockchain bond trading platform.
Meanwhile, Spanish bank BBVA has conducted at least eight blockchain pilots for issuing different types of bonds.