Financial services firm J.P. Morgan announced on Thursday that it facilitated a $50 million onchain US commercial paper issuance for Galaxy Digital Holdings on the Solana blockchain, marking one of the earliest debt transactions conducted on a public network in the United States.
The offering, a tokenized short-term corporate bond, was developed by J.P. Morgan. According to the firm, it created the corresponding blockchain token for the bond and managed the settlement of the primary issuance.
The tokenized securities were acquired by asset manager Franklin Templeton and crypto exchange Coinbase, while issuance and redemption will be executed in Circle’s USDC (USDC) dollar-pegged stablecoin, as stated in the press release.
“We’re implementing the model we’ve long supported: open, programmable infrastructure that enables institutional-grade financial products,” Jason Urban, the global head of trading at Galaxy, remarked.
Tokenizing commercial, sovereign, and municipal bonds can significantly reduce costs and settlement times by eliminating financial intermediaries from the issuance and clearing processes. Analysts predict that the sector could expand to a $300 billion market capitalization by 2030.
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Mainland China, Hong Kong tokenize bonds
Hong Kong’s Monetary Authority (HKMA) has made the tokenization of financial assets a priority, unveiling a five-year plan to bring bonds and physical assets onchain by 2030.
Tokenizing real-world assets enhances cross-border settlement efficiency and positions Hong Kong for the integration of artificial intelligence into the financial system, according to the HKMA.
In November, Hua Xia Bank, a publicly traded financial services company with connections to China’s central government, issued 4.5 billion in tokenized yuan bonds, equivalent to $600 million.
This bond tranche, issued by Hua Xia Financial Leasing, featured a 1.84% yield and is settled exclusively in the digital yuan.
The digital yuan, also known as the digital renminbi, is a central bank digital currency (CBDC) introduced by China’s government, which began development in 2014.
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