Blockchain is finally starting to catch on in capital markets. This year, OMFIF’s Digital assets report reveals two novel sources of data indicating a slow but steady gathering of momentum behind the adoption of blockchain.
First, we are delighted to present the first league tables detailing the main players in the world of blockchain bond issuance, including the top issuers, platform providers, legal advisers, exchanges and bookrunners since 2022.
The league tables reveal that the market is gathering impressive pace. Since the beginning of August 2024, some 14 bonds had been issued on blockchain. With many more expected, the market should easily outstrip 2023, when some 16 blockchain bonds were issued and 2022, when the figure was only nine – meaning we expect the blockchain bond market to more than double in size between 2022 and 2024, with the pace still accelerating.
OMFIF’s Digital assets report seeks to uncover who the key players in this long-awaited revolution are. However, the report also features a survey of market participants that gives insight into the changing attitudes of the market. Some 38% of respondents said they are looking at adopting distributed ledger technology or blockchain in debt issuance.
The survey reveals some fascinating insights into the concerns and expectations market participants have of the coming updates to financial market infrastructure. While almost all expect a substantial degree of tokenisation within three to 10 years, it is interesting to note that many market participants are cool on the possibility of moving to T+1 or even more rapid settlement because of the operational challenges it might entail.
The report features thought leadership from OMFIF’s experts, as well as contributions from BNP Paribas, Slovenia’s Ministry of Finance, KfW, Banque de France, Hong Kong Monetary Authority and Swiss National Bank, covering topics including cash settlement for wholesale markets, tokenisation and the changes to market structure that introducing DLT will imply.
Enter your details on the right to access the report.
Key findings:
- 73 central banks with $5.4tn in international reserves responded to the survey, 171 central banks are analysed and ranked by reserve assets in the back tables
- Close to 80% of reserve managers expect equilibrium real interest rates to be higher relative to pre-pandemic levels
- Around 30% are looking to increase their investments in government bonds and quasi-government bonds, and a quarter (24%) are looking to increase holdings of corporate bonds
- Nearly 30% expect to increase their dollar holdings in the next 12-24 months, more than any other currency
- Net demand for renminbi has slipped to just 2% this year, compared to 12% in 2023 and over 30% in 2022
- 40% anticipate investing more in green bonds in the next two years
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