Market Horizons podcast: Digital Bonds – are they the future of capital markets?

Together, they discuss Digital Bonds – which some are calling the future of debt capital markets – and look at some of the potential benefits and challenges of adopting these new structures.

Glossary:

Digital Bond / Blockchain Bond - a wholly dematerialised bond that is issued, registered, settled, transferred and custodied natively using DLT.

DLT / Distributed Ledger Technology - a set of protocols which enable data to be securely and accurately created and stored on a shared, de-centralised database, generally using cryptography. New information – representing records of transactions – is recorded on the distributed ledger only after validation by multiple computers (referred to as nodes) using a pre-agreed consensus mechanism.

Blockchain - the most common example of DLT, and is so-called because each new transaction or bundle of transactions is recorded in a new ‘block’ of data which, once validated by the system, is added to the end of the existing sequential blocks of information (like adding links to a chain).