UBS Group AG (NYSE:UBS) has launched a Sfr375mln ($370mln) bond that the Swiss bank said is the world's first digital bond to be publicly traded and settled on both blockchain-based and traditional exchanges.
The three-year bond with a 2.33% coupon will be issued on the blockchain-based platform of SIX Digital Exchange (SDX) and dual-listed on SDX and the SIX Swiss Exchange.
The digital bond has the same legal status and rating as a traditional UBS AG senior unsecured note, the bank said.
In a statement, Beatriz Martin, UBS Group Treasurer, said: “We are proud to leverage distributed ledger technology to launch the inaugural UBS digital bond. This shows our commitment to support the development of new financial market infrastructure. UBS is committed to using technology not just as an enabler, but to making it a true differentiator for UBS.”
The digital bond settles via the SDX distributed ledger-based central securities depository (CSD) network. Settlement is instant and automatic and does not require a central clearing counterparty, UBS said.
Investors can settle and clear the digital bond on either SDX CSD directly or on SIX via an operational link announced last month.
The European Investment Bank last year issued its first digital bond on a public blockchain.