Today the City of Lugano announced it had issued a CHF 100 million ($108m) digital bond on the blockchain of the SIX Digital Exchange (SDX). The six-year bond with a 1.625% coupon can be held either in the SDX central securities depository (CSD) or the conventional Swiss CSD, SIX SIS.
Additionally, the blockchain bond can be traded on the regulated SDX exchange and the SIX Swiss Exchange. However, the bond issuance and all post trade processes happen on SDX, and the two CSDs have been integrated.
This dual arrangement means it doesn’t matter whether or not the investor has blockchain access. It is similar to a CHF 375 million issuance by UBS last year and significantly helps with the liquidity of the blockchain-based bond.
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