World Bank Rolls Out First Digital Bond Issuance

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Daily News:

Chinese Energy Giant Sets New Precedent with E-CNY Crude Oil Deal

World Bank Rolls Out First Digital Bond Issuance

U.S. Senators Set in Motion Bipartisan Proof-of-Reserves Bill

Chinese Energy Giant Sets New Precedent With E-CNY Crude Oil Deal:

• PetroChina, a Chinese state-owned oil and gas company, has successfully executed its first international crude oil trade using China's digital currency, the digital yuan (e-CNY). This landmark transaction, in which PetroChina purchased 1 million barrels of oil, represents a significant step in the increasing international adoption and usage of the e-CNY.

• The transaction was announced by the Shanghai Petroleum and Natural Gas Exchange (SHPGX), though details regarding the seller and the exact value of the deal were not disclosed. The SHPGX highlighted that this deal aligns with the government's directive to utilize the e-CNY in cross-border trade, showcasing the digital currency’s capability for international transactions.

• The use of the e-CNY for cross-border transactions has been gaining momentum, with transactions totaling 10.16 trillion yuan ($1.36 trillion) from January to September. The digital yuan, a central bank digital currency issued by the People’s Bank of China, aims not only to phase out cash but also to combat money laundering and terrorism financing. Its adoption and prevalence are notably increasing in emerging economies, further establishing its position in the international financial landscape.

World Bank Rolls Out First Digital Bond Issuance:

• The World Bank has successfully launched its first digital securities issue, raising €100 million ($105.9 million) via Euroclear's newly introduced Digital Securities platform, which is built upon distributed ledger technology (DLT). This digital bond, with a three-year maturity, will support the World Bank’s sustainable development initiatives and is listed on the Luxembourg Stock Exchange.

• The issuance and settlement of the digital bond were facilitated using Euroclear’s Digital Financial Market Infrastructure (D-FMI). The process saw Citi managing the issuance and payment, TD Securities as the dealer, and Euroclear Bank acting as the Central Securities Depository.

• This issuance represents a significant advancement in the integration of blockchain technology in financial services, showcasing its potential to enhance efficiency, reduce costs, and democratize investment. The use of asset tokenization, as demonstrated in this instance, enables the breakdown of high-value assets into purchasable tokens, increasing market accessibility and liquidity. This innovation is poised to revolutionize finance, with forecasts predicting the tokenization of illiquid assets could grow to $16 trillion by 2030, making up 10% of global GDP.

U.S. Senators Set in Motion Bipartisan Proof-of-Reserves Bill:

• U.S. Senators Thom Tillis (R-NC) and John Hickenlooper (D-CO) have proposed the PROOF Act, a bill aimed at preventing collapses like that of FTX, by enforcing monthly proof-of-reserves (PoR) reports and mitigating the unethical mingling of customer funds.

• The bill establishes basic account standards to secure customer funds, requires cryptographic verification of reserves and liabilities, and outlines civil penalties for violations. The legislation has garnered support from both industry experts and advocacy groups, emphasizing its potential to enhance transparency and safety in the crypto industry.

• Despite uncertainty regarding its passage, the PROOF Act represents a bipartisan effort to regulate digital asset exchanges, reflecting a broader movement towards implementing safeguards and transparency measures in the crypto space.

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