Hana Bank issued a blockchain-based digital bond and implemented same-day settlement (T+0) for the first time in South Korea’s foreign-currency bond issuance market. It cut the settlement period, which previously took 3 to 5 business days, to same day to improve funding efficiency.

Hana Bank said on Sept. 21 it issued a $100 million, five-year foreign-currency digital bond on Sept. 18 using global international central securities depository Euroclear’s blockchain platform, D-FMI (Digital Financial Market Infrastructure).

A digital bond is a bond in which a series of processes, including issuance, registration and settlement, are handled on a distributed ledger technology (DLT) network. The issuance is the first case of a domestic financial institution directly using Euroclear’s proprietary blockchain infrastructure to issue a digital bond.

The bond applies a T+0 method under which allocation and payment settlement are completed on the issue date. It shortened the settlement period, typically 3 to 5 business days in the foreign-currency bond issuance process, by handling bond allocation and fund transfers on a distributed ledger basis.

It also considered transaction convenience for global investors. Linked to Euroclear’s existing international settlement network, it enabled use of the same Global Medium Term Note (GMTN) programme documentation used for conventional foreign-currency bond issuance.

Standard Chartered participated as the sole lead manager and handled the entire process, from bond structuring to issuance and sales.

A Hana Bank official said, "This $100 million digital bond issuance and implementation of same-day settlement is a meaningful attempt to diversify funding tools and apply blockchain technology to the capital market."