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[NEWS] Daiwa Securities, SBI and Progma team up to jointly test ways to improve the efficiency of digital corporate bonds

2023/12/12Editors of Iolite

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"Bianca" and "Progma" to collaborate

"Bianca" and "Progma" to collaborate

Daiwa Securities, Progmat, and SBI R3 (SBI R3 Japan) announced on the 12th that they will collaborate on issuing digital corporate bonds and improving their efficiency.

The three companies will work together to verify how to improve the efficiency of corporate bond issuance by linking Biancha, a corporate bond pre-marketing system jointly developed by Daiwa Securities and SBI R3, with Progmat, a general digital asset platform developed by Progmat.

Public offerings of 20 trillion yen are issued annually in Japan, the majority of which are "book-entry bonds" based on the Securities Depository Center. With book-entry bonds, the life cycle of the bond from the issuance decision to redemption is managed by the Japan Securities Depository Center, in cooperation with securities companies, entrusted financial institutions, etc.

However, this life cycle is not very efficient, and the three companies point out that in recent years, new initiatives using blockchain technology have been accelerating worldwide.

In this environment, Daiwa Securities and SBI R3 focused on pre-marketing, which is the most cumbersome part of the bond issuance process, and jointly developed Bianca, a corporate bond pre-marketing system, on the blockchain "Corda."

In addition, a total of 26 public offerings of digital securities (Security Tokens = STs) have been made public, totaling 130 billion yen, of which 18 have been made using Progma, totaling 90 billion yen.

Expectations for infrastructure interoperability

Progma has announced that it will build a "standard infrastructure" based on collaboration with "DBM," a function for digital bond management in B-Apps Online, with the aim of popularizing "digital bonds" that use blockchain to enable issuers, bondholders, financial agents, original ledger managers, and other related parties to share and manage information on a common platform.

B-Apps Online boasts a 95% share of the market as a system for entrusted financial institutions in "book-entry bonds," and will develop optimal product models and business processes through collaboration with Progma.

Bianca has been developed with the aim of streamlining the issuance process of book-entry bonds, and Progma also uses Corda. Since the two systems use the same blockchain, interoperability is expected, and the companies decided to link Bianca and Progma to verify the efficiency of the bond lifecycle.

In Japan, in order to determine the conditions for issuance of public bonds, underwriting securities companies conduct pre-marketing to confirm the investment intentions of institutional investors for most cases. At that time, investors communicate their investment intentions to sales representatives at securities companies, and the information is collected among securities companies to investigate the investment intentions of all investors.

In this process, each company has duplicated work, and interviews are conducted by phone, email, and chat, which is a burden on the work. Therefore, Daiwa Securities and SBI R3 have jointly developed Bianca, a system that allows investors to directly enter their investment intentions into the blockchain and collects them.

In the future, Bianca will be expanded into a system that allows conditions and allocation to be determined after pre-marketing. After the allocation is decided, the company aims to improve the efficiency of the entire bond lifecycle by utilizing Progma in the issuance and payment process.

Reference:Announcement
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