FAB, ADX start on Middle East's first 'digital bond'

Dubai: Abu Dhabi's ADX and mega-bank FAB have started on the first 'digital bond' in the Middle East.

This means start of the pricing stage as an initial step to listing the first distributed ledger technology (DLT)-based bond in the region. (Digital bonds are issued and traded using Blockchain technology.)

Issued by First Abu Dhabi Bank (using HSBC Orion, the digital assets platform), the upcoming bond listing represents a 'landmark step in ADX’s mission to lead financial innovation and support Abu Dhabi’s digital transformation agenda'.

Global investors can access the digital bond through accounts held with CMU, Euroclear and Clearstream, onboarding onto HSBC Orion as direct participant.

Or do so through their existing custodian who can participate through one of the above options.

"Introducing the digital bond supports its (ADX's) broader ambition to offer innovative financial instruments and signifies the Exchange’s pioneering role in introducing tokenised finance," said a statement.

"Digital bonds, fixed-income securities issued and recorded on blockchain technology, offer operational efficiencies, improved settlement cycles, reduced counterparty risk, improved security and enhanced transparency for institutional investors."

HSBC Orion is operated by the Central Moneymarkets Unit (CMU) in Hong Kong.

“The successful issuance of MENA’s first blockchain-based digital bond marks a defining moment in our journey to transform capital markets through innovation," said Abdulla Salem Alnuaimi, Group CEO of ADX.

"ADX was central in facilitating this milestone, ensuring the bond’s seamless integration with existing post-trade infrastructure and compatibility with global settlement standards.”