Bitcoin Suisse Issues Tokenized Bond on Polygon

Bitcoin Suisse, a Swiss crypto-financial services provider managing $5.57 billion in assets, has issued a tokenized bond product on Polygon.

Announced on June 11, Bitcoin Suisse’s bond is considered investment-grade quality and is overcollateralized, meaning the value of the assets backing the bond exceeds that of the loan. Transactions are settled using USDC, the second-largest stablecoin by market cap.

The bond was issued in partnership with Obligate, an on-chain capital markets platform that has assisted many mainstream companies issue blockchain-based bonds. Qualified investors using Obligate directly invested in the private debt issuance.

“The agreement creates faster, reduced-cost access to capital for Bitcoin Suisse, while at the same time creating a new tokenized real-world asset investment opportunity for Obligate’s accredited investors,” Obligate said.

“Bitcoin Suisse remains committed to bridge the gap between traditional finance and decentralized technology,” said Sandro Huwyler, Bitcoin Suisse’s head of treasury. “The milestone of issuing this tokenized bond reinforces our pioneering role in the industry.”

Bitcoin Suisse was among Switzerland's first institutions to offer loans collateralized by crypto assets to clients. Bitcoin Suisse will use the funds from the bond to support the growth of its domestic lending business.

On-chain real-world assets grow

Bitcoin Suisse’s foray into on-chain bond issuance comes as the tokenized real-world asset (RWA) sector is booming.

The market cap of tokenized treasury assets has more than doubled since the start of the year, currently sitting at more than $1.49 billion, according to Rwa.xyz.

The trend has been buoyed by BlackRock, the world’s largest asset manager, launching the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which has ballooned to a market cap of $462.3 million since launching in March. The Franklin Onchain U.S. Government Money Fund (FOBXX) also grew by 27% over the past quarter to sit at $344.4 million.

Bond tokenization is also beginning to gain momentum, with Misyon Bank, a leading Turkish investment bank, launching a real-world asset tokenization platform on Avalanche targeting corporate and government bonds last week. The company also became the first institution to offer corporate Eurobonds and Turkish sovereign bonds to retail investors.

Obligate brings bonds on-chain

Obligate has been extremely active in tokenizing bonds this year, with the firm bringing bonds on-chain from firms spanning aviation, logistics and invoice financing, and small and medium-sized enterprises (SMEs) in emerging markets

In December, Obligate expanded onto Base, the Layer 2 network from Coinbase, enabling the creation of on-chain capital debt markets on the L2. The following month, Obligate was invited to join the Tokenized Asset Coalition alongside Coinbase and Circle. In April, the firm teamed up with Mikro Capital to launch its first bond on Base

Last September 2023, Obligate also launched the first USDC-denominated structured investment product on Polygon.