Banking News

Thai bond market explores blockchain

corporate bonds

The Thai Bond Market Association is exploring using blockchain for corporate bond transactions. According to the Bangkok Post, the local SEC has agreed to the system in principle, and the platform will launch next month.

The system aims to speed up the settlement process. There’s a three-phase rollout, and after the third phase, the settlement will be almost real-time as opposed to the current two days. This should cut the duration of the entire process from 1-3 days to 7-10 days.

Additionally, there will be no middlemen between the bond traders and the Thailand Securities Depository.

The permissioned blockchain will allow registered members to participate. These include issuers, regulators, registered companies, and investors.

Three phases

In the first phase, the platform will be a registration service for bond trading and information. The functionality includes bond subscription, settlement information, and verification of bond transactions.

After a further nine months of development, the second phase will include servicing bond deposits.

The third phase will include a Bond Coin in a clearing and settlement system that will be developed in the next twelve months.

The system will provide three end-user portals, one for issuers to track the demand for their bond, another for investors, and a third for registrars.

Other lending blockchain projects

There have been several debt issuance tests including a JP Morgan test with the National Bank of Canada. Also, BBVA issued corporate debt, and Russia’s largest bank, Sberbank, placed a commercial bond using blockchain.

For syndicated loans, Finastra launched their Fusion Lendercomm platform several months ago.