The World Bank has collaborated with the Swiss National Bank (SNB) and SIX Digital Exchange (SDX) to issue its first CHF digital bond, marking a significant advancement in the digitalization of capital markets. The bond, which is valued at CHF 200 million and will mature over seven years, is the largest World Bank CHF bond issuance since 2009. It will be settled using Swiss Franc wholesale Central Bank Digital Currency (wCBDC), provided by the SNB.
This initiative uses Distributed Ledger Technology (DLT) to support the financing of the World Bank's sustainable development activities. It also builds on the World Bank's recent digital issuance on Euroclear’s Digital Financial Market Infrastructure (D-FMI).
The partnership with SNB and SDX aims to scale up efforts in applying DLT in capital markets. This collaboration introduces wCBDC by SNB for initial settlement, while coupon and redemption payments will be made using tokenized CHF on SDX. The SDX connects to conventional settlement systems such as Euroclear and Clearstream via SIX SIS, allowing investors to hold the digital bond through their traditional custodians.
Jorge Familiar, Vice President and Treasurer of the World Bank said, “We are grateful for the opportunity to issue the first CHF digital bond as an international issuer. This achievement marks another significant step in the World Bank's commitment to increasing capital markets' efficiency through digitalization in partnership with central banks and central securities depositories."
David Newns, Head SIX Digital Exchange commented on this milestone stating that "Being able to settle wholesale transactions in tokenized central bank money is a critical requirement for the adoption of a blockchain-based capital markets infrastructure."
Marie-Claire Ouziel, Global Head of Bonds at Commerzbank, who served as lead manager for this transaction added that "This digital bond issuance marks another triumph for the World Bank, cementing its position as an avant-garde issuer embracing innovative technologies."
The World Bank has been issuing sustainable development bonds in the international capital markets for over 70 years to fund programs and activities that achieve a positive impact. This latest digital bond issuance is yet another step towards promoting efficiency and innovation in capital markets.