Treasury cancels next week's T-bill auctions
At A Glance
- The Bureau of the Treasury has canceled its short-term borrowing plan for next week to make way for the government's offering of blockchain-backed debt instruments.<br>Auctions for three-month, six-month, and one-year Treasury bills scheduled for Monday, Nov. 20, have been canceled.<br>The cancellation is due to the issuance of the one-year Tokenized Treasury bonds.<br>The government originally planned to raise P15 billion through Treasury bill auctions.<br>The Treasury announced the launch of tokenized bond issuance aiming to raise at least P10 billion.<br>Tokenized Treasury bonds will be offered with a minimum denomination of P10 million.<br>The tokenized bonds will be offered on Nov. 20, Monday.
The Bureau of the Treasury has decided to cancel its short-term borrowing plan for next week to give way for the government's maiden offering of blockchain-backed debt instruments.
In a notice signed by Deputy National Treasurer Erwin D. Sta. Ana, the bureau has announced the cancellation of the auctions for three-month, six-month, and one-year Treasury bills scheduled for Monday, Nov. 20.
Sta. Ana explained that the cancellation is due to the issuance of the one-year Tokenized Treasury bonds.
As part of the October domestic borrowing program, the government had originally planned to raise P15 billion by selling 91-day, 182-day, and 364-day Treasury bills on Monday.
On Thursday, the Treasury announced the launch of its tokenized bond issuance, aiming to raise at least P10 billion.
These digital peso-denominated IOUs will be offered with a minimum denomination of P10 million, which means it caters to institutional investors looking to diversify their portfolios.
The tokenized treasury bonds, a digital version of a regular bond, will be offered on Nov. 20, Monday.
A tokenized bond exists as a digital token on a blockchain, making it easier to buy, sell, and keep track of the bond because everything is done electronically.
“It's kind of like how you can use a digital wallet to store and manage your money instead of carrying around physical cash,” an analyst explained. “Tokenized bonds make it simpler and more efficient to invest in bonds using technology.”
The Treasury tapped the Land Bank of the Philippines and Development Bank of the Philippines (DBP) as it issue managers.
”As part of the national government’s government securities digitalization roadmap, the maiden issuance of TTBs [tokenized Treasury bonds] aims to provide the proof of concept for the wider use of DLT [distributed ledger technology] in the government bond market,” the bureau said.
“This proof of concept will serve as the starting point of the NG’s broader agenda of democratizing investment through digital technology, significantly reducing settlement risk and friction costs, ultimately leading to a financially inclusive local bond market,” it added.