Bank of Canada pilot issues country’s first tokenized bond

A pilot involving the central bank and major financial institutions tested whether distributed ledger infrastructure could streamline bond issuance, trading and settlement.

Canada has completed a pilot program testing the use of distributed ledger technology in bond markets, culminating in the issuance of the country’s first tokenized bond, according to a Friday announcement from the Bank of Canada.

The experiment, known as Project Samara, involved the Bank of Canada, Export Development Canada, Royal Bank of Canada and TD Bank Group, and explored if blockchain-style infrastructure could streamline bond issuance, trading and settlement.

As part of the pilot, Export Development Canada issued a $100 million Canadian dollar ($73.6 million) bond with a maturity of less than three months to a closed group of investors. The security was issued, traded and settled on a distributed ledger platform, with payments processed using wholesale central bank deposits rather than commercial bank money.

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