The Abu Dhabi Securities Exchange (ADX) has officially started the pricing phase for the first digital bond in the MENA region that utilizes distributed ledger technology (DLT). This bond is issued by First Abu Dhabi Bank (FAB) and supported by HSBC Orion, highlighting a significant advancement in the region’s financial innovation landscape.
This bond, created with blockchain technology and listed on the ADX, will be accessible through HSBC Orion, a premier digital assets platform managed by the Central Moneymarkets Unit (CMU) based in Hong Kong.
This project showcases a strategic partnership among ADX, FAB, and HSBC, reinforcing Abu Dhabi’s goal to cultivate a diverse and technology-driven capital market.
“The successful launch of the first blockchain-based digital bond in MENA, in collaboration with FAB and HSBC, is a remarkable milestone in our efforts to revolutionize capital markets through innovation,” stated Abdulla Salem Alnuaimi, group CEO of ADX.
A Significant Achievement for ADX
“ADX played a crucial role in facilitating this landmark, ensuring that the bond integrates smoothly with the current post-trade frameworks and adheres to international settlement standards.”
International investors can access this digital bond through accounts managed by CMU, Euroclear, and Clearstream, either directly through HSBC Orion or through their existing custodians. The bond offers several advantages: operational efficiencies, quicker settlement times, reduced counterparty risk, enhanced security, and greater transparency — which are all essential features of blockchain-based fixed income products.
“This initiative not only broadens access to institutional-quality digital instruments but also sets the groundwork for a wider range of tokenized assets, including green bonds, sukuk, and property-related products,” Alnuaimi continued. “It solidifies Abu Dhabi’s status as a prominent global financial hub.”
Lars Kramer, group CFO at First Abu Dhabi Bank, commented: “This achievement signifies a pivotal step forward in our innovation path, cementing FAB’s position as the issuer of the first blockchain-powered digital bond in the MENA region.”
“Alongside ADX and HSBC, we are establishing new standards for efficiency, transparency, and security, in alignment with the UAE’s forward-thinking regulatory framework.”
HSBC took on the roles of sole global coordinator, lead manager, and bookrunner for this deal. Mohamed Al Marzooqi, CEO, UAE at HSBC Bank Middle East, said: “The successful introduction of MENA’s first digital bond on ADX using HSBC Orion illustrates our commitment to making the concept of tokenization a reality in this region. By combining our global expertise with reliable local partners like ADX and FAB, we are strengthening the capital markets in the region.”