KB Kookmin Bank has successfully issued a blockchain-based US dollar digital bond, the first such deal by a South Korean bank. It is stepping up efforts to build digital asset-based financial infrastructure following a technology verification for a won stablecoin.

KB Kookmin Bank said on June 10 it issued a $100 million two-year digital bond with HSBC as sole arranger.

A digital bond uses blockchain technology to handle the entire bond process, including issuance, registration, trading and settlement. It can shorten settlement periods and improve operational efficiency compared with conventional bonds.

The bond was issued through the digital asset platform HSBC Orion. It was also linked to a clearing and settlement system operated by a central securities depository under the Hong Kong Monetary Authority.

KB Kookmin Bank also used the Digital Bond Grant Scheme run by the Hong Kong Monetary Authority. It expects the move to reduce some issuance costs.

KB Kookmin Bank is pushing to expand financial services using digital assets and blockchain technology, including recently completing a technology verification for won stablecoin-based payments and remittances. It said the issuance helped it gain experience in blockchain-based fundraising and confirm the potential to broaden its global investor base.

A KB Kookmin Bank official said, "The issuance of a digital bond is a case of applying blockchain technology to actual fundraising," adding, "We will provide customers with safer and more convenient financial services through digital financial innovation."