Capital markets News

Daiwa Securities issues digital bond paying emoney interest

daiwa securities digital bond

Today Daiwa Securities announced it issued a one year, one billion yen ($6.6m) digital bond using the Progmat tokenization platform. The most novel aspect of the public bond is the interest will be paid in emoney from Rakuten Edy, one of the popular wallets in Japan. Unsurprisingly, the bond is targeting individual investors.

Daiwa Securities is Japan’s second largest broker behind Nomura.

A key purpose of the digital bond is to showcase to issuers the potential of issuing bonds where interest payments are not necessarily in cash. The likely goal might be marketing. While Daiwa did not mention it, other likely payment types could be stablecoins or utility tokens. Progmat is gearing up to launch its Progmat Coin solution for stablecoins.

Daiwa Securities has been a prolific security token issuer. So far it has issued and underwritten 29.7 billion yen ($197m) in real estate tokens. In 2021, it issued two small digital corporate bonds as trials of Bitcoin’s Lightning network sidechain. It used digital coins for a delivery versus payment settlement. Recently Daiwa announced plans for public blockchain issuances.

With today’s announcement, Daiwa was keen to highlight some of its digital currency initiatives. It has participated in the “Security Token Settlement Practice Subcommittee” part of the Digital Currency Forum. In turn, the Forum is linked to DCJPY, the major Japanese tokenized deposit initiative. Additionally, Daiwa is participating in the central bank CBDC Forum.

Daiwa Securities and Rakuten Securities underwrote the latest bond, with Mizuho as the bond administrator and MUFG as the bond ledger manager.

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