The Abu Dhabi Stock Exchange (ADX) is the largest exchange in the UAE, the second largest exchange in the Middle East and North Africa (MENA), and has taken the first step to listing the first DLT/blockchain-based bonds in the MENA region. We will use the Orion platform to launch our products in collaboration with HSBC.
Blockchain-enabled bonds will be issued by the first Bank of Abu Dhabi (FAB). This recently announced that it is working on issuing AED Stablecoin.
According to a press release, the upcoming blockchain-enabled digital bond list represents a groundbreaking step in ADX’s mission to lead ADX’s financial innovation and support Abu Dhabi’s digital transformation agenda.
ADX taps HSBC and FAB with the launch of Digital Bond
The blockchain-enabled combination is run by Hong Kong’s Central Money Market Unit (CMU) and is powered by HSBC Orion, which is composed of support from major international law firms. This allows global investors to access digital bonds through accounts held at CMU Euroclear and Clearstream, onboard to HSBC Orion as direct participants, and onboard through existing custodians who can participate through any of the options listed above.
ADX considers this to be an introduction to tokenized finance. Digital bonds, fixed income securities issued and recorded on blockchain technology provide operational efficiency, improved settlement cycles, reduced counterparty risk, improved security, and increased institutional transparency.
ADX Group Chief Executive Officer Abdulla Salem Alnuaimi said this marks the moments that determine the moments that transform capital markets through innovation by ensuring seamless integration of bonds with existing post-trade infrastructure and compatibility with global settlement standards.
He said, “This initiative not only expands access to facility-grade digital equipment, but also lays the foundation for a wider range of tokenized assets, including green bonds, sukuks and real estate products.”
Additionally, Lars Kramer, Group Chief Financial Officer of First Ab Dhabi Bank (FAB), noted that this is a Fab milestone as he will become the first issuer of MENA’s blockchain-based digital bond.
He said, “We not only drive Fab’s digital transformation by transforming traditional payment processes into a seamless digital workflow, but also helping investors navigate the global digital asset outlook.
HSBC Orion promoted European Investment Bank’s first digital bond
On behalf of HSBC, Mohamed Al Marzooqi, UAE Chief Executive Officer of HSBC Bank Middle East Limited, believes that launches using HSBC Orion are demonstrating how banks are transforming into the reality that banks will strengthen capital markets in the Mena region and become more transparent and accessible.
Since its launch, HSBC Orion has been leading the way in digitalizing capital market infrastructure. It has promoted the launch of the European Investment Bank’s first digital bond in Pound Starling, the provision of the world’s first multi-currency digital bond, and the issuance of the largest digital bonds of the HKSAR government.
HSBC is also the world’s first bank to provide symbolic ownership of physical gold.
