In the past ten days the City of Lugano and SIX have issued digital bonds on the SIX Digital Exchange (SDX). The platform hosts the first production pilot of a wholesale Central Bank Digital Currency (wCBDC), Project Helvetia III, and the initial wCBDC usage encouraged a flurry of digital bond issuances last year. The two year extension of the wCBDC pilot in June 2024 was followed by a bit of a lull, with the only primary activity since then being Lugano’s third digital bond in November 2024. This month’s issuances may signal the start of a new wave of activity.
This is Lugano’s fourth digital bond, a CHF 100 million seven year issuance carrying a 0.6125% coupon. It is using the wCBDC for settlement and the SDX central securities depository (CSD) to register the bond, with the listing on the main SIX Swiss Exchange. SDX linked its CSD to the main SIS CSD so that institutions can trade the bonds in the conventional manner without needing to integrate with a blockchain.
“I strongly believe in the future of digital assets and the tokenization of real-world assets (RWA) and traditional financial instruments. This transformation is already underway and will continue to profoundly change the way we issue, trade, and manage value,” said Paulo Bortolon, Deputy CFO for Lugano on Linkedin.
“With these issuances, we are not only innovating public debt management, but giving a real push to a financial revolution that will bring greater efficiency, transparency, and accessibility to markets. Lugano wants to be an active part of this change.”
The latest SIX digital bond
Turning to the SIX bond, its last bond issuance was part of the launch of SDX in November 2021. At that stage the bond was split between a digital and conventional issuance, whereas this time the full CHF 250 million is digital. The 1.00% coupon 2032 bond will also be listed on the main SIX Swiss Exchange, and the company said it had significant investor interest.
UBS, Vontobel and Raiffeisen were joint lead managers for the Lugano bond, and Raiffeisen, UBS and Zürcher Kantonalbank led the SIX transaction.
