This document discusses developing corporate bond markets in India using blockchain technology. It provides an overview of debt markets globally and in India, noting that corporate bond markets are underdeveloped in India compared to other major economies. The document proposes using blockchain to digitally represent and transfer corporate bonds, replacing the current manual paper-based system. This could improve efficiency by reducing costs, automating processes, and providing a single shared ledger of transactions. Developing corporate bond markets is important for meeting India's large financing needs for industry and infrastructure.

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Corporate Lending Business
SMART CORPORATE BOND – P2P LENDING
Author
Sanjaya Kumar Panigrahi
+61 434674947
+91 8378969010

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Table of Contents
1. EXECUTIVE SUMMARY........................................................................................................................................... 2
2. AN OVERVIEW: DEBT MARKET............................................................................................................................ 3
WHAT IS DEBT FUND?.................................................................................................................................................... 3
ANALYSIS ON INDIAN DEBT MARKET ........................................................................................................................- 3 -
ANALYSIS ON GLOBAL DEBT MARKET .......................................................................................................................- 1 -
WHY CORPORATE BOND?...........................................................................................................................................- 2 -
FEATURES & BENEFITS OF CORPORATE BOND FUND.................................................................................................- 3 -
CURRENT STATUS OF INDIA CORPORATE BOND ......................................................................................................- 4 -
3. CORPORATE BOND - ISSUES ............................................................................................................................- 5 -
4. WHY BLOCKCHAIN DISTRIBUTED LEDGER? ....................................................................................................- 6 -
OVERVIEW OF BLOCKCHAIN TECHNOLOGY ...............................................................................................................- 6 -
5. HOW BLOCKCHAIN CAN TRANSFER CORPORATE BONDS...............................................................................- 8 -
6. THE BLOCKCHAIN WAY OF CORPORATE BOND ................................................................................................- 9 -
THE STEPS REQUIRED FOR CORPORATE BOND .......................................................................................................- 10 -
SMART CORPORATE BOND BUILDING PROCESS......................................................................................................- 11 -
BENEFITS OF CORPORATE BIND USING BLOCKCHAIN ...........................................................................................- 12 -
P2P SMART BONDS .................................................................................................................................................- 12 -
BENEFITS OF SMART BOND......................................................................................................................................- 13 -
7. CONCLUSION....................................................................................................................................................- 14 -
8. REFERENCE:.....................................................................................................................................................- 15 -

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1.Executive Summary
This whitepaper proposes an alternative to the traditional applications currently used to support the
issuance of corporate bonds in the capital markets industry. Instead of physical certificates/notes,
bonds can be represented digitally in a public permissioned ledger using blockchain technology.
Development of corporate bond market in India remains crucial for meeting the financing
requirement of industry and infrastructure sector. Despite various initiatives undertaken in the past,
there is little change in the overall market microstructure of the corporate bond market in India. It
is found that the gradual increase in proportion of market-based sources in total debt financing by
non-financial companies is confined only to the larger sized firms. Though finance and infrastructure
companies dominate the corporate bond market, mutual funds are playing an important role in
diversifying the issuance base of the market. Empirical analysis suggests significantly higher risk-
premia associated with lower-rated bonds in the private placement market.
While global issuance of bonds has grown significantly, the technology disruptions of today’s
information age have made it difficult to achieve the optimization required to limit the inefficiency
involved. The current issuance process remains highly manual and paper intensive. Redundant
record keeping is leading to large reconciliations internally and externally that contribute to the
higher cost for issuance.
Digital technology would improve the efficiency of security issuance by replacing a paper-intensive,
manual process with smart contract-led automation, reduction of intermediaries, and fully
automated asset servicing through a distributed ledger.
Key to this improvement is going digital, and an innovative path which is emerging is the use of
blockchain. Blockchain technology has the potential to change the financial transaction processing
cost model and has the potential to provide unprecedented transaction security. These advantages
can be derived from technology-enabled processing over distributed systems. This technology could
help the industry revolutionize the security issuance process in both private and Public sectors,
offering a single view of immutable transactions which would serve as a true copy shared among all
the syndicate members and stakeholders.

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2.An Overview: Debt Market
Organisations need capital for their daily operations as well as future expansions and growth
opportunities.
To achieve this, companies have two ways –
1. Debt instruments
2. Equity instruments
Debt is a safer option as it doesn’t affect the shareholders of the company directly. Hence, most
companies prefer to go for issuing debt instruments to raise capital for their operation.
What is debt fund?
Buying a debt can be considered as lending money on loan to the issuing entity. A debt fund invests
in fixed interest generating securities such as corporate bonds, government securities, treasury bills,
commercial paper and other money market instruments.
The fundamental reason for investing in debt funds is to earn interest income and capital
appreciation. The issuers of debt instruments pre-decide the interest rate you will receive as well as
the maturity period. Hence, they are also known as ‘fixed-income’ securities.
Analysis on Indian Debt Market
India has debt markets for government securities, corporate bonds, and short-term bank and
commercial paper. The Government securities market is far the largest market, it has expanded
considerably since 1991, as has the range of available maturities and secondary market activity in
both short- and longer-term maturities. Since 1997, when banks were permitted to hold corporate
debt securities, the market for these securities has grown as well, although it is dominated by paper
issued by state-owned enterprises rather than private sector entities, and trading is limited.
India’s debt markets as a whole have grown steadily since 1992, and many efforts are under way
to support further development. However, policymakers face a number of major challenges to
further market development particularly by providing a more supportive economic, legal, and
regulatory policy environment; upgrading market infrastructure; authorizing the use of new debt
instruments; and improving education services for debt market participants.
If the impediments to growth identified in this study can be removed, secondary market trading in
government and corporate debt securities should increase significantly. In the short term, secondary
market trading in corporate debt securities is likely to show the strongest growth, once the planned
stamp duty reforms are implemented.

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India recorded a government debt equivalent to 69.62 percent of the country's Gross Domestic
Product in the 2019-20 fiscal year.
Analysis on Global Debt Market
Most emerging market economies (EMEs), especially in Asia, have bank-dominated financial system
with Government-owned development finance institutions channelizing resources to specific sectors
of the economy in consonance with the overall industrial policy and developmental agenda. Specific
examples include the Brazilian Development Bank (BNDES) in Brazil, Japan Development Bank in
Japan, and the Korea Development Bank in South Korea which played crucial roles in post war
reconstruction and development of state-sponsored industries.

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Till the 1990s, the bank dominated financial system remained the cornerstone of export-oriented
industrialisation in East Asia. It was the East Asian crisis of 1997-98 that brought forward the urgent
need to develop financial markets to cater long term financing needs of an ebullient and dynamic
corporate sector. With the banking sector severely hit by the asset-liability mismatches and high
foreign debt, excessive dependence on the banking sector gave way to the development of a well-
diversified debt market, specifically for corporate bonds, to supplement the availability of bank
finance.
The Asian financial crisis brought into forefront the fact that bond market and banks need not
compete with each other, rather they could be supplementing each other in serving the financing
needs of large and small firms (Gyntelberg, et al., 2006).
In India, development banks were gradually converted into universal banks, based on the
recommendations of the Report of the Working Group on the Development Financial Institutions
(DFIs) (RBI 2004).
Developing the corporate bond market assumes crucial importance for India, especially in the
context of channelling funding to long term infrastructure, the requirement of which has been
estimated at around US$ 4.5 trillion with cumulative infrastructure investment gap of US $ 526
billion till 2040 (Economic Survey 2017-18). Currently the corporate debt to GDP ratio in India is
significantly lower than some developing countries such as Malaysia, South Korea, Brazil and Turkey
(Table 1). Further, the total volume of trade in the secondary market for corporate debt has
increased at a modest pace, with the monthly total traded value of corporate bonds standing at
`1,210 billion in October 2018.
Why Corporate Bond?
Corporate bond securities are the underlying portfolios of credit opportunities for debt funds. When
you buy one, the company is borrowing money from you. The firm will repay the principal after the
maturity period as per the agreement. In the meantime, you will receive the interest (fixed income)
– known as the coupon. Generally, coupon payments in India are made twice a year.

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Corporate bonds are an excellent choice for investors looking for a fixed but higher income from a
safe option. Corporate bonds are a low-risk investment vehicle when compared to debt funds as it
ensures capital protection. If you opt for corporate bond funds that invest in high-quality debt
instruments, then it can serve your financial goals better.
Long-term debt funds often tend to become riskier when interest rates fluctuate beyond
expectations. As a result, corporate bond funds invest in scrips to combat volatility. They usually go
for an investment horizon of one year to four years. This can be an added benefit if you remain
invested for up to three years. It can also prove to be more tax-efficient if you fall in the highest
income tax slab.
Features & benefits of corporate bond fund
a) Components of corporate bonds
Corporate bond funds invest predominantly in debt papers. Companies issue the debt
papers, which include bonds, debentures, commercial papers, and structured obligations.
Each of the components carries a unique risk profile and maturity date.
b) Price of the bond
Every bond has a price, and it is dynamic. You can buy the same bond at different prices,
based on the time you choose to buy. Investors should check how it varies from the par
value – it will give information about the market movement.
c) Par Value of the bond
This is the amount the company (bond issuer) gives you when the bond matures. It is the
loan principal. In India, a corporate bond’s par value is usually Rs 1,000.
d) Coupon (interest)
When you buy a bond, the company will payout interest regularly until you exit the corporate
bond or the bond matures. This interest is called the coupon, which is a specific percentage
of the par value.
e) Current Yield

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The annual returns you make from the bond is called the current yield. For example, if the
coupon rate of a bond with Rs 1,000 par value is 20%, then the issuer pays Rs 200 as the
interest per year.
f) Yield to Maturity (YTM)
This is the in-house rate of returns of all the cash-flows in the bond, the present bond price,
the coupon payments until maturity and the principal. Greater the YTM, higher will be your
returns and vice versa.
g) Tax-efficiency
If you are holding your corporate bond fund for less than three years, then you must pay
short-term capital gains tax (STCG) based on your tax slab. On the other hand, Section 112
of the Indian Income Tax mandates 20% tax on long-term capital gains. This applies to
those who hold the bond for more than three years.
h) Exposure & allocation
Corporate bond funds, sometimes, do take small exposures to government securities as
well. But they do so only when no suitable opportunities in the credit space are available.
On average, corporate bond funds will have approximately 5.22% allocation to sovereign
fixed income.
Current Status of India Corporate Bond
India has been distinctly lagging behind other EMEs in developing its long-term corporate debt
market. While the equity market in India has been quite active, size of the corporate debt market is
very small compared to not only developed markets, but also major EMEs in Asia such as Malaysia,
Thailand and China. Traditionally, bank finance coupled with equity markets and external borrowings
has been the preferred funding source in India. Small and medium enterprises face significant
challenges in raising funds for growth.
The proportion of bank loans to GDP in India is approximately 37% (Reinhart, C. M. & Rogoff, K.
S.), while that of corporate debt to GDP is only 5.4% (BIS, 2012). The BIS report estimates the
corporate debt securities in India to be nearly INR 4.5 trillion in 2011. However, according to the
Securities and Exchange Board of India (henceforth SEBI) database, outstanding corporate bonds
amount to around INR 9 trillion during the same period making it nearly 10.5% of GDP (SEBI, 2012).
In contrast, corporate bond outstanding is close to 90% of GDP in USA where the corporate bond
market is most developed and bond market financing has long replaced bank financing; around 34%
in Japan, and close to 60% in South Korea (BIS, 2012). In terms of size, as of 2011, the Indian
corporate bond market is close to 7% of that of China and 15% of that of South Korea (BIS, 2012).
For a sample of eight Indian corporations that featured in Forbes 2000, corporate bonds accounted
for only 21% of total long term financing.
In contrast, corporate bonds accounted for nearly 80% of total long term debt financing by 5
corporations in the four developed economies of USA, Germany, Japan and South Korea.2 In India
the long-term debt market consists largely of government securities (henceforth G-Secs). In 2011,

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in terms of size, Indian corporate bond market stood at INR 8,895 billion which was only 31% of G-
Secs, the outstanding issuances of which stood at a staggering INR 28,427 billion (SEBI, 2012).
Based on the experience of G7 countries since the 1970s, Goldman Sachs has estimated that the
total capitalization of the Indian debt market (including public-sector debt) could grow nearly four-
fold over the next decade from roughly USD 400 billion in 2006 to USD 1.5 trillion by 2016 (Goldman
Sachs, 2007). This growth, if not crowded out by public sector debt, could result in increased access
to debt markets for Indian corporates.
And also, the current Corporate bond were managed in centralised based systems which is led India
to lag behind the RoW.
3.Corporate Bond - Issues
Corporate bonds are issued by companies and can be either private or publicly traded. Every bond is
classified according to its risk factor. Special bond rating services – Standard & Poor’s, Moody’s and Fitch
– dominate the industry and estimate the risk of each bond issue. After the estimation, the bond receives
its rating, which signifies its risk factor.
o Trust: A major roadblock in the liquidity and capital in the market is the thrustless system.
Currently, companies have to showcase their assets/valuable holdings to get funds from lenders,
and because of the lack of trust in the ecosystem, raising funds is difficult.
o Inefficiency: There are many intermediaries that complicate the value chain and dictate the
system because of their monopoly in the system.

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o Resiliency: The time and cost of debt fundraising is higher for corporate borrowers. Lenders
need to depend on agent banks for decisions on lending because of the lack of transparency,
visibility and access regarding real-time corporate information data of borrowers. After
borrowing/lending, the life cycle of debt financial instruments (issuance and trading) should be
managed efficiently.
o Security: As there are many intermediaries available to process the Bond, there is increase
chance on fraud on investment. The investment offer is completely fake. The investment exists,
but the money you give the scammer doesn't go towards that investment. The scammer says
they represent a well-known investment company – but they're lying.
o Obscurity : Scammer may provide high and quick returns or sometimes tax-free benefits, share,
mortgage, real estate or virtual currency investments, 'high return' schemes, option trading or
foreign currency trading an opportunity with no risk or low risk, because you will: be able to sell
anytime, get a refund for non-performance have insured or 'guaranteed' transactions be able
to swap one investment for another inside information, the opportunity to invest before a public
float or discounts for early bird investors.
4.Why Blockchain Distributed Ledger?
Overview of Blockchain Technology
The blockchain technology enables a group of users with a common goal to create an authenticated
and accountable distributed chronological tracking system (through use of a ledger) of transactions
or events. The functioning of the blockchain is guaranteed without the intervention of a central
authority or central maintenance, but thanks to a self-managed peer-to-peer network of application
nodes. The transactions are validated by these participants throughout a calculation process. The
security relies on mechanisms based on cryptography. Moreover, the duplication of the ledger on
each computer of the network makes it extremely difficult to falsify or remove a record.

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Blockchain can actually be thought of as the combination of several different existing technologies.
While these technologies themselves aren't new, it is the ways in which they are combined and
applied which brought about blockchain.
o Private key cryptography
o A distributed network that includes a shared ledger
o Means of accounting for the transactions and records related to the network
Private Keys
To illustrate the technology of private cryptographic keys, it helps to envision two individuals
who wish to conduct a transaction online. Each of these individuals holds two keys: one of
these is private and one is public. By combining the public and private keys, this aspect of
cryptography allows individuals to generate a secure digital identity reference point. This
secure identity is a major component of blockchain technology. Together, a public and a
private key create a digital signature, which is a useful tool for certifying and controlling
ownership.
Distributed Network
The digital signature of the cryptography element is then combined with the distributed
network technology component. Blockchain technology acts as a large network of individuals
who can act as validators to reach a consensus about various things, including transactions.
This process is certified by mathematical verification and is used to secure the network. By
combining the use of cryptographic keys with a distributed network, blockchain allows for
new types of digital interactions.
Process of Confirmation
One of the most important aspects of blockchain technology is the way that it confirms and
validates transactions. In the example above, in which two individuals wish to conduct a
transaction online, each with a private and a public key, blockchain allows the first person
(person A) to use their private key to attach information regarding the transaction to the
public key of the second person (person B). This information together forms part of a block,
which contains a digital signature as well as a timestamp and other relevant information
about the transaction, but not the identities of the individuals involved in that transaction.
That block is then transmitted across the blockchain network to all of the nodes, or other
component parts of the network, which will then act as validators for the transaction.
All of this sending of information and validating of blocks requires huge amounts of computing power.
In practical terms, it may seem unrealistic to expect millions of computers around the world to all
be willing to dedicate computing power and other resources to this endeavour. One solution to this
issue for the blockchain network is mining. Mining is related to a traditional economic issue called
the "tragedy of the commons." Put simply, this concept summarizes a situation in which individuals
who each act independently in their own self-interests tend to behave in ways contrary to the
common good of all users as a result of depleting a resource through their action at a collective
level. In the process of blockchain validation, an individual who gives up a small portion of his or

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her computational power in order to provide a service to the network thereby earns a reward. By
acting out of self-interest (aiming to earn the reward: in this case, a small amount of a
cryptocurrency), that person has been incentivized to help serve the needs of the broader network.
The blockchain consists of three basic three component:
1. A Transaction
2. A Record of Transaction
3. A mechanism for verification and storing Transaction
5.How Blockchain Can Transfer Corporate Bonds
Þ The Corporate bond can be implemented using blockchain technology thereby enabling substitution
of physical documents with fully digitalized smart corporate bond.
Þ Smart Contracts executed on a blockchain-based platform can reduce the use of intermediaries
between producers and consumers and provide greater efficiency.
Þ Distributed ledger contains the state and history of the transaction record.it uses cryptography via
computer-based encryption techniques such as public/private keys and hash functions to store
assets and validate transactions. A distributed ledger can be defined as a record information or
database that is shared across the network.
Þ The physical certificates and notes of the traditional bond issuance process are replaced with digital
assets on a blockchain based solution. The transactions executed on a public blockchain-based
platform are immutable and transparent. As for a private blockchain solution controlled by private
actors, immutability cannot be guaranteed as the participants can alter or change the transaction
records.
Þ This is enabled via the ability of the distributed ledger technology to reduce the ambiguity and
complexity of the contract terms by increased automation of the process and its ability to uniquely
refer the stored transactions.
Þ A distributed ledger could also facilitate implementation of a unique reference system in bond debt
markets like unique security identifier. Currently the securities market uses various identifiers like
the ISIN but the blockchain technology can integrate the unique security identifiers into the trade
the life cycle process.
Þ Smart contracts would sit on top of these distributed ledgers and would facilitate auto-execution of
the terms and conditions as well as confidentiality agreements associated with a contract without
manual intervention. The smart contracts are programmed with the contents of these terms and
conditions, and the agreements and their executions are triggered by sending transactions to those
contracts along with some money.

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6.The Blockchain way of Corporate Bond
A blockchain solution for corporate bond issuance would enable digitization, improve costs and
increase efficiency. Blockchain would help the issuer view a real-time list of investors and their
positions. Under the current system involving book entry the issuer of the bonds does not have
direct insight into who the beneficial owners of the bonds are.
A few basic high-level properties have to be defined for the securities issued on blockchain:
o Type and amount of the issued bonds should be specified
o Issuer identity should be determined by a defined set of identification rules using standard
pre-defined rules required or mandated for establishing issuer identity on a blockchain based
platform
o A regulatory body can explicitly acknowledge security issuance by co-signing the
corresponding transaction together with the issuer or by granting the issuer a special kind
of Digital Certificate.
o Properties of the securities such as “Non-transferable”, “Locked”, etc. should be specified
Certain factors as depicted in the exhibit below need to be considered while defining an end-to-end
digital-bonds issuance solution on a blockchain platform addressing the above high-level security
properties.

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The steps required for Corporate Bond
1. New Bonds are issued into the Asset Ledger by the Issuer. The right to create the new asset on
the Asset ledger is granted to the issuer for a short duration. Origination of the asset is
represented digitally by a new “Tokenized Asset” by the issuer.
2. The Investment banker. The issuer approaches the Investment Bank for help with the bonds
issuance process and the Investment Banker initiates a digital term sheet and obtains sign off
from the issuer. All authorizations of the participants in the blockchain are made by digital
signatures which saves time.
3. Lead Manager and Syndicate members have a single view of the Master Book on a blockchain
platform. The Master Book contains orders or bids from prospective investors with details as to
the quantity of shares and their price.
4. The Fund Manager uses tokens to manage the investor’s holdings recorded on a fund ledger.
The tokens represent cash or security based on the investor transaction. These tokens are used
to determine investor portfolio value and to represent investor’s holding on the blockchain
platform. These tokens will be used in case of trade settlement happening within the platform
or outside the platform.
5. Cash transfers are also represented via tokens with buy and sell facility. Tokens can also be
used for representing credit and debits in corresponding Cash/Banking & Capital Markets the
way we see it Suspense accounts on the platform. These tokens are assigned to a stable price
and could represent one unit of a particular currency.
6. Custodians or Banks: These participants come into play when settlement happens outside the
blockchain platform. They act as keepers of tokens represented on a blockchain platform and
transfer security/money to the beneficiary accounts corresponding to the tokens represented on
the platform. Their involvement is reduced and near real-time settlement is achieved.
7. Digital bonds are credited to investor’s account (replacing the paper notes/certificates)

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8. Mandatory Corporate Events and Disbursements are executed by triggering Smart Contracts.
These events are initiated by the corporation and affects all shareholders. Dividend payments,
coupon payment, interest, stock splits, mergers, return of capital, bonus issue, etc. comes under
mandatory corporate events and disbursements. These corporate events can be converted into
smart contract which would auto-execute updating all shareholders of the asset and cash
account based on the corporate event. These are executed based on the ownership of the asset
in the blockchain as well as the due date on the timestamp.
9. Regulatory reporting related to issuance process becomes easier as the data is now publicly
accessible with complete electronic audit trail providing full transparency. Regulators could audit
live data directly on the public ledger and verify the transaction history and details on the
platform. This helps in better monitoring of the transactions. Also increases the quality of the
reporting one by the regulators and enables “smart” auditing of the capital and risk positions of
banks and other financial services clients. Live data audits provide the regulators the ability to
detect financial instability, fraud, money laundering and financial crime at an early stage.
Smart Corporate Bond building process
The high-level process for smart bond is automated due to execution of smart contracts on a
blockchain based platform. The issuer, or the company offering the bonds, chooses an investment
bank for the issuance and investment bankers are appointed as book runners.
o Blockchain enables Near Real-Time book-building process.
o The Master Book is available as a single view for all the participants in the blockchain, including
the internal departments of the bank and external stakeholders such as Syndicate members.
o External and internal reconciliations are not required for the records. This reduces manual efforts
and cuts the entire time taken for the book building process by about 35% to 50%.
o Since blockchain technology allows direct dealings between issuers, syndicate members, and
the investment bank, the sales team of the investment bank involved can gradually be
eliminated.
e.g. For a new equity IPO, 7% of the total issuance is charged as fees. The commission for the
sales team is 3.5%. So for a $1 billion issue there is a savings of $35M.
o In general, process simplification and less manual intervention means smart contracts on
blockchain saves both time and money.

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Benefits of Corporate Bind Using Blockchain
P2P Smart Bonds
P2P smart bond is facilitated by online lending market platforms, which connect businesses and
consumers needing to borrow money and investors looking to earn higher fixed interest-like returns
than available in conventional fixed interest instruments. Borrowers can access funds for a wide
variety of reasons, from debt consolidation, home improvement, vehicle finance, bridging finance
through to business loans. The amounts borrowed range from as little as $500 for individuals through
to $300 000 for businesses. The P2P platform anonymously matches up buyers and lenders using
sophisticated computer algorithms, and some are exploring using blockchain for the security and
transparency this technology provides.

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Benefits of Smart Bond
Þ Issuers would expect to accrue the benefit, from the reduction in administrative costs of raising
capital and bonds servicing. Issuers would have complete transparency in the end-to-end life
cycle of security issuance.
Þ The lead manager and syndicate members would have a unified view of the master book,
eliminating the need for every participant to maintain their own copy. This would reduce the
administrative overhead and cost.
Þ The major roles of Custodians/Sub-custodians would be eroded and their role may narrow to
‘keeper of the tokens’ and ensuring automated bonds servicing operations are performed
correctly.
Þ Investors would benefit as the process becomes transparent and automated.
Þ Intermediaries such as Issuing Agent, Paying Agent, ‘Bill & Deliver’ Agent and ‘Settle with issuer’
Agent would cease to existence and would have no role to play in security issuance process.
Þ Regulators would benefit from the publicly accessible historical record of all transactions,
enabling effective monitoring and auditing by participants, supervisors and regulators.

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7.Conclusion
The current security issuance process remains manual, paper intensive, and redundant due to the
involvement of many intermediaries. This makes the issuance process inefficient, and time
consuming, and adds additional cost to the issuer.
This inefficient process opens the industry to numerous risks and challenges such as multiple
versions of truth between various participants, a long clearing and settlement cycle, settlement risk,
counterparty risk, less transparency, limited audit trail, non- availability of systems 24/7, etc.
To meet the increasing demand of reducing cost and improving efficiency, the security issuance
industry has to make way for the emerging blockchain technology. Doing so will mean restructuring
their technology platform to incorporate the blockchain concept.
A primary task is to select a blockchain platform which would meet institution needs.
The real benefit of blockchain will accrue when all the players in the issuance process share the
same blockchain platform. This will result in a quicker settlement cycle and a unified view of master
book, along with cost savings by eliminating intermediaries, having no reconciliations (internally and
externally), and lowering administrative cost. At the same time the blockchain platform will provide
access to immutable, fully auditable records across a secure network available 24/7.
The issuance of digital bonds on blockchain with smart contracts doesn’t bring efficiency to the
security issuance process only, but also provides advantage in other part of the asset life cycle. By
attaching the smart contracts to bonds the security becomes self-sufficient to auto execute the
corporate actions without any manual interaction or getting intermediaries involved.
Firms can benefit by engaging in a focused innovation lab to identify key business capabilities (like
building a firm-wide global master book, transaction / regulatory reporting, asset servicing) and
create accelerated proof of concept(s), followed by an iterative transformation journey to start
realizing potential benefits of blockchain.

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8.Reference:
1. https://cleartax.in/s/corporate-bond-funds
2. https://www.ifc.org/wps/wcm/connect/40b69ae4-29a8-44d8-95d4-
1ac3b920051a/Building_Local_Bonds_Chp.11.pdf?MOD=AJPERES&CVID=j1lpLSz
3. https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/2ICBMIMM141CFFF458BB4B3A9F4C006F4
AE4897F.PDF
4. https://moneysmart.gov.au/investment-warnings/investment-scams
5. https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/BULLETINJANUARY2019_FBB1F301E2A2
64F8E8999CED9F9117658.PDF
6. https://www.finextra.com/blogposting/18485/alternative-lending-platforms-to-experience-
rapid-growth-in-2020
7. www.capgemini.com.au
8. https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-
economics-corporate-bond-report-2018-030518.pdf