First Abu Dhabi Bank To Launch Middle East’s First Digital Bond

HomeNews* First Abu Dhabi Bank plans to issue the Middle East’s first digital bond using the HSBC Orion digital assets platform.

• The digital bond is at the pre-issuance pricing stage and will be listed on the Abu Dhabi Securities Exchange (ADX).
• The project aims to expand access to digital financial instruments and pave the way for other tokenized assets.
• HSBC Orion’s Hong Kong blockchain platform will process the issuance, allowing both global and local investors to participate.
• First Abu Dhabi Bank also has blockchain experience in payments and is involved with several cross-border financial projects. First Abu Dhabi Bank is preparing to launch the region’s first digital bond on the HSBC Orion digital assets platform. The digital bond, still in the pre-issuance pricing phase, will be listed on the Abu Dhabi Securities Exchange (ADX) once released. The stock exchange made this step possible after partnering with HSBC to explore digital bonds in late 2023.

• Advertisement - According to ADX Group CEO Abdulla Salem Alnuaimi, the initiative is designed to increase institutional access to digital financial products. Alnuaimi said, “This initiative not only expands access to institutional-grade digital instruments, but also lays the foundation for a broader class of tokenized assets—including green bonds, sukuk, and real estate-linked products.” Digital bonds offer key benefits, such as streamlined processes through smart contracts, which automate tasks, faster settlement, and lower risk between transaction parties.

HSBC Orion supports these issuances through several blockchain networks, with this issuance using its Hong Kong platform. This network links with the Central Moneymarkets Unit (CMU), Hong Kong’s central securities depository. Through these connections, investors worldwide can participate using their current processes or by joining HSBC Orion directly. HSBC acts as the sole global coordinator and lead manager for the transaction.

Globally, digital bond platforms are growing, but most handle transactions infrequently. In the past nine months, HSBC Orion has led with several digital bond issuances. These include a $128 million bond by HSBC in September 2023, a $108 million digital bond by the European Investment Bank, and a digital treasury note issued by Luxembourg.

Beyond this initiative, First Abu Dhabi Bank continues to advance blockchain in payments. The bank has plans to launch a Dirham stablecoin, uses J.P. Morgan’s Kinexys Digital Payments platform, and was among the first foreign banks to utilize China’s digital yuan. It also participates in the mBridge cross-border central bank digital currency project, which includes central banks in China, Hong Kong, Saudi Arabia, Thailand, and the UAE.

Additional information on the bond’s issuance amount and coupon will be shared when available. For more details, visit the First Abu Dhabi Bank website.

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