Technically, the blockchain is already present and alive in the market of fixed income securities, and it will certainly change everything
Thursday last week, on the 11th January 2018, the German unit of Telefonica (Telefonica Deutschland) has annnounced that it plans to issue a note (a bond) for 50 million Euros by using the Blockchain.
The bond will have a one year maturity.
The rationale of such sale is not for marketing reasons, the company states, but actually they are using this technology for the purpose of lowering servicing costs of financing and diversify its funding vehicle's streams.
This is not the first time that it had happened, in fact in June 2017, Daimler AG (Mercedes & others' automaker) has issued a bond of 100 million Euros and a small part of it was floated through the blockchain tech.
The benefits are clear:
Photo from Pixabay
This will speed up the process incredibly, in a cheaper and more secure manner.
Security is in fact another matter that needs to be assessed, and this method of debt issuance will definetely increase transparency (skipping all those Mifid 2 regulatory obstacles that market participants are struggling with nowadays).
The reality is that both Telefonica, Daimler and the banks involved (DZ Bank and Landesbank-Baden-Wuerttember) are merely in a testing phase.
However we can almost certainly say, and it is pretty evident, that the blockchain is coming fast, disrupting everything, nothing can stop it, the benefits are too good.
I thought my job may be safe from the advent of this tech, but I realize my bond advisory job may not be that safe after all
Or maybe it's an opportunity
Follow me,
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