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The Beijing-based Asian Infrastructure Investment Bank (AIIB) has raised $300 million in its first bond offering, using Euroclear’s blockchain-based technology, the same blockchain platform used by the World Bank.

The AAA-rated bond offers a 4% coupon and matures in January 2027. It was issued on Euroclear’s distributed ledger (DLT) platform. This is the first time an Asia-based institution has used this blockchain-based system to issue bonds, and it is the first US dollar-denominated digital bond on the platform.

Citigroup Inc. and BMO Capital Markets played a key role in the transaction. Citi handled distribution and settlement between the issuer and investors. BMO Capital Markets acted as co-dealer alongside Citi, which also acted as issuing and paying agent.

AIIB Treasurer Domenico Nardelli said the bank would assess demand in the secondary market before considering further digital bond sales in the coming year. This cautious approach reflects the nascent but growing nature of digital bonds in the fixed income market.

The AIIB’s successful issuance follows the example of other major institutions looking into blockchain-based bonds. Notable examples include the World Bank and the European Investment Bank, both of which have conducted similar digital bond sales in recent years.

This development represents an important milestone in the integration of blockchain technology into traditional financial markets. By using distributed ledger technology, institutions like the AIIB can potentially increase transparency, reduce operational risks and improve the efficiency of bond issuance and trading processes. As more institutions adopt blockchain-based technologies, such developments could lead to broader changes in how global bond markets function.

Crypto Briefing recently reported on the increasing adoption of token funds, driven by investments in government bonds, highlighting growing efficiency in asset management.

For example, Citi, Mastercard and JPMorgan recently experimented with tokenizing a private equity fund via a shared ledger for asset settlement and realized tremendous improvements in automation and data standardization in traditional financial models.

In terms of bonds, Japanese company Metaplanet Inc. recently announced plans to purchase $6.3 million worth of Bitcoin. through a bond issue, which led to a significant increase in the share price.

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