Pioneering Supranational Bond Tokenisation
Hong Yi Koh
In November 2022, InterOpera's wholly-owned subsidiary, Shareable Assets, successfully carried out a groundbreaking pilot project focused on the tokenisation of a supranational bond. The project aimed to streamline and operationalise the bond tokenisation and offer process for individual investors in Singapore, with participants accessing the bond through a user-friendly mobile SaaS solution.

Benefits of Bond Tokenisation

The bond tokenisation process offers several advantages over traditional processes currently available in the market:

1. Automated client onboarding for individual investors.
2. Access to high-quality supranational bonds at affordable denominations of $10.
3. Instant order taking and seamless exchange of bond tokens.
4. Peer-to-peer transfers.
5. Settlement period reduction from T+2 to T+0.
6. Modular blockchain architecture design that facilitates connectivity within existing web2.0 capital market infrastructure.

Market Insights

Through the pilot, we observed that individual investors prefer high-quality sovereign debt to mitigate market volatility. These investors typically trade bonds over extended periods, posing challenges to traditional business models driven by trading volumes and commissions. Blockchain-based trading infrastructure offers alternative revenue models that can address these challenges.

Innovation and Disruption

InterOpera's blockchain design is innovative, utilising interchain accounts technology and proprietary solutions to enable different marketplaces and exchanges to function as regulated decentralised registries. Coupled with self-custody solutions enabled by smartphones, this presents new opportunities for digital securities and digital fund structures at lower cost.

Lessons Learned and Potential Improvements

True operational efficiency and cost synergies could be achieved by issuing bond tokens natively on-chain. Blockchain technology can address the high costs associated with record-keeping and ownership transfers, particularly when segregating retail investor accounts.

InterOpera's pilot project on supranational bond tokenisation demonstrates the potential of blockchain technology to revolutionise the bond market. By streamlining processes, reducing costs, and offering alternative revenue models, blockchain-based solutions have the potential to significantly impact the future of capital markets.

Chart 1: Benefits of Shareable Assets’ bond tokenisation process as compared to traditional processes in the marketplace today.

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