Digitally Native Notes delivering issuance, distribution and primary market settlement of fully dematerialised international securities
London – Citi’s Issuer Services, a part of Securities Services, today acted as the Issuing and Paying Agent for the first Digitally Native Note (DNN) issuance under English Law via Euroclear’s Digital Financial Market Infrastructure (D-FMI) distributed ledger technology (DLT) platform. The EUR 100 million 3-year DNN was issued by the World Bank - International Bank for Reconstruction and Development (IBRD) - (rated Aaa/AAA) and listed on the Luxembourg Stock Exchange.
The creation and settlement of DNNs on a T0 basis is an important first step in the evolution of bonds and lays the foundations for a fully digital end to end transaction lifecycle.
This partnership between existing key industry stakeholders provides a scalable model that delivers the benefits of digitization whilst preserving existing bond accessibility and liquidity, illustrating how blockchain technology can be integrated with existing capital markets architecture. Today is the culmination of a multi-year program with stakeholders including Citi, Euroclear and IBRD to deliver a sustainable digital infrastructure for the issuance of DNNs. It is envisaged that the D-FMI will improve efficiency and growth opportunities for debt capital market participants as the infrastructure continues to develop.
“We are delighted to work with our partners at Euroclear and IBRD on this inaugural digital issuance. It demonstrates the continued value of the international issuance model and its potential to transform the way in which the debt capital markets operate. As one of the world’s leading providers of services to debt issuers we continue to work with our partners to provide innovative solutions that deliver benefits including improved transparency, efficiency, liquidity, and client experience” said Andrew Mulley, EMEA Head of Citi's Issuer Services.
“This initiative perfectly aligns to our mission of connecting our clients into new digital networks that enable them to create, or invest in, digital assets to unlock new efficiency, value and operating models” said Ryan Marsh, Global Head of Blockchain, Digital Assets & Innovation for Citi Securities Services. “This is the latest in a series of digital bond initiatives that we expect to participate in.”
Lieve Mostrey, Euroclear Group CEO said: "Our collaborations with Citi, TD Securities and the IBRD have been instrumental in the launch of this major innovation in asset issuance. The integration of our distributed ledger technology capabilities marks a significant milestone in the digital transformation of our global financial markets. Today's announcement represents a momentous stride towards realising the boundless potential of digital assets, underpinned by our shared commitment to pioneering innovation and delivering transformative solutions for investors and issuers on a global scale."
“Since the World Bank’s first blockchain bond “bond-i”, debt capital markets have been moving towards digitization, step-by-step. We are pleased to announce that today we contributed to this ongoing development through issuing the inaugural digital native note on Euroclear’s D-FMI platform, working together with Citibank and others,” said Jorge Familiar, Vice President and Treasurer, World Bank.
Citi continues to develop digital asset solutions, in line with its goals and risk appetite, using a unified set of shared technology capabilities and a common strategic approach. These innovative solutions enhance Citi’s products and services including digital money, trade, securities, custody, asset servicing and collateral mobility.
With approximately US $28 trillion1 of assets under custody, administration and trust and an industry-leading proprietary network spanning over 60 markets,
Citi Services provides cross-border support for clients with extensive on-the-ground local market expertise, innovative post-trade technologies, customized data solutions and a wide range of securities services solutions that can be tailored to meet clients’ needs.
Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in nearly 160 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.
1As of 30 June 2023.