The financial market is witnessing a change. For the first time ever, EOS blockchain is picked for a digital bond. The dBonds team tokenized and issued a Deutsche Bank bond on the EOS mainnet, unpacking a whole new world for the capital markets.
It started with the dBonds team arranging several key players. The agreement involved authorized UK-based custodian Queen Street Finance to issue tokenized bonds under the dBonds standard (DUSD stablecoin is used, which is pegged to USD).
From the creation, allocation, transfer, and management of the bond, everything is taken care of using the distributed ledger technology.
How it works?
- First, the nominated fiat bond (USD) is locked within the custodian’s escrow account.
- Then a stablecoin is issued (as DUSD stablecoin) by the thedbondsacc contract at the request of emitent (unitedbridge account)
- Then the issued dbond is locked within the thedeposbank contract.
- New DUSD is issued (so the dbond is considered as the DUSD collateral).
Because of the nature of the collateral, any DUSD holder can redeem the bond at the current market rate after the expiration.
Plus, through the token’s metadata, one can easily verify the details. You can see if the bond is under the said token, if it exists, or if it is locked within the custodian.
Also, it goes without saying: finding purchaser for your digital bond is on you. When the bond is live, one can have brokers, business owners, or any blockchain enthusiast purchase the Deutsche Bank bond through you.
Not only is this going to increase trust and transparency in the debt capital markets but also boost the EOS ecosystem. For a long time now, EOS has been aiming to build industrial-scale apps for processing transactions, and this breakthrough is going to influence other players in the industry.
The goal, of course, is to revolutionize the capital markets through the blockchain technology. Because EOS offers a number of benefits, we expect more to this easy, efficient, and transparent bond issuing mechanism.