Citi’s Issuer Services Facilitates First Digitally Native Note Issuance on Euroclear’s DLT Platform
Citi’s Issuer Services, a segment of Securities Services, recently acted as the Issuing and Paying Agent for the issuance of the first Digitally Native Note (DNN) under English Law through Euroclear’s Digital Financial Market Infrastructure (D-FMI) distributed ledger technology (DLT) platform. The transaction involved a EUR 100 million, 3-year DNN issued by the World Bank – International Bank for Reconstruction and Development (IBRD) and was listed on the Luxembourg Stock Exchange.
The Significance of Digitally Native Note Issuance
The issuance and settlement of DNNs on a T0 (same-day) basis represents a major advancement in the bond sector. This achievement paves the way for a fully digital transaction lifecycle. By merging the benefits of digitization with existing bond accessibility and liquidity, this initiative demonstrates how blockchain technology can integrate with current capital market frameworks. It aims to improve efficiency and create growth opportunities for debt capital market players as the D-FMI infrastructure evolves.
A Multi-Year Collaborative Effort
This milestone is the result of a multi-year collaborative effort involving key industry stakeholders such as Citi, Euroclear, and IBRD. The objective is to establish a robust digital infrastructure for issuing DNNs. Andrew Mulley, EMEA Head of Citi’s Issuer Services, emphasized the potential of this initiative to revolutionize debt capital market operations. Ryan Marsh, Global Head of Blockchain, Digital Assets & Innovation for Citi Securities Services, also hinted at upcoming digital bond initiatives.
Reflecting on Past and Future Digital Initiatives
Lieve Mostrey, Euroclear Group CEO, and Jorge Familiar, Vice President and Treasurer of the World Bank, expressed their enthusiasm for this digital venture. This initiative builds on the success of the World Bank’s previous blockchain bond “bond-i,” further advancing the digitization journey of debt capital markets. Citi continues to pursue digital asset solutions aligned with its strategic objectives and risk tolerance, leveraging a unified technological framework for innovative solutions in digital money, trade, securities, custody, asset servicing, and collateral mobility.
Citi Securities Services at a Glance
Citi Securities Services manages approximately US $28 trillion of assets under custody, administration, and trust. It offers a wide range of tailored securities services solutions to meet clients’ needs. With a proprietary network spanning over 60 markets, it provides robust cross-border support to clients across nearly 160 countries and jurisdictions. This showcases Citi’s extensive capabilities in managing various financial products and services.
Hot Take: Transforming Debt Capital Markets through Digitization
The successful issuance of the first Digitally Native Note on Euroclear’s DLT platform marks a significant step towards transforming debt capital markets through digitization. This achievement demonstrates the potential for blockchain technology to revolutionize traditional bond transactions and streamline the entire lifecycle. As more players embrace digital initiatives like DNNs, we can expect increased efficiency, improved accessibility, and new growth opportunities in the debt capital market space. Citi’s involvement in this milestone highlights their commitment to driving innovation and shaping the future of finance.
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