Tokenized corporate bonds found their debut with Muff Trading AG—a Swiss boutique adept in physical commodities, specializing in sourcing precious metals and raw materials from South America—leveraging Obligate’s innovative marketplace. While the exact figures and terms of this debt issuance remain undisclosed, the transaction marked a pioneering moment for blockchain-based financing.
Launching ahead of Obligate’s public platform debut on March 27, this milestone signals a new era in decentralized debt issuance.
Obligate’s Blockchain-Backed Bond Issuance Framework
Regulated as a financial intermediary within Switzerland, Obligate empowers companies to issue bonds and commercial papers directly on the blockchain, breaking free from traditional bank intermediation. Smart contracts deliver automated efficiency while adhering to established financial regulations. Compliance is ensured through thorough know-your-customer (KYC) verifications before issuers can onboard. Investors, in turn, hold ERC-20 tokens representing their bonds in crypto wallets, entitling them to payments upon maturity or collateral claims if defaults occur.
The Rise of On-Chain Debt Markets in DeFi
This advancement underscores the expanding footprint of blockchain-enabled debt markets within decentralized finance, illustrating how crypto platforms are increasingly bridging the gap between real-world financial services and sophisticated investors. To illustrate, last month Siemens, a German industrial heavyweight, issued $64 million worth of bonds with a one-year term directly on Polygon.
Inserting key industry data: According to recent blockchain financing reports, the global bond market exceeds $128 trillion, yet less than 1% of bonds are currently issued via blockchain, signaling immense growth potential for platforms like Obligate.
Insights From Industry Leaders
“Bond markets rank as the largest financial arena, yet they predominantly cater to large corporations,” remarked Benedikt Schuppli, CEO of Obligate, in a conversation with CoinDesk.
Schuppli further elaborated that blockchain debt issuance offers a crucial edge by directly connecting issuers with investors—cutting out middlemen and slashing administrative overhead. This democratizes access, enabling smaller enterprises to tap into bond financing routes traditionally reserved for large firms.
Reflecting on their inaugural experience, Luca Muff, founder and CEO of Muff Trading, shared with CoinDesk that choosing Obligate was a strategic move amid challenging relationships with conventional banks for mid-sized commodity traders.
Fee Structure and Payment Innovations
- Issuance fees on Obligate stand at a modest 0.5% of the debt volume, paid by the issuer.
- This differs from Siemens’ recent on-chain bond launch, which employed traditional fiat payment rails.
- Muff’s issuance cleverly bypassed banks’ fiat channels, opting instead for funding through Circle’s USDC stablecoin.
- The debt secured underlying receivables safeguarded by Apex Group, a major financial services custodian managing approximately $200 billion in assets and partnering closely with Obligate.
Market Context and Institutional Adoption
Bruce Jackson, Apex’s head of digital asset funds and business, noted, “Given the tight lending environment in traditional markets, this issuance opens a gateway for investors to acquire on-chain bonds and commercial paper at significantly reduced costs and turnaround times—all within a secure, regulated context familiar to conventional finance players.”
Obligate’s preference for Polygon—an Ethereum sidechain known for scalability and low transaction costs—exemplifies the blockchain’s escalating appeal to institutional capital. Earlier this year, investment management firm Hamilton Lane launched tokenized funds on Polygon, while Clearpool, a decentralized debt protocol, prepares to debut its exclusive institutional platform, Prime, on the same network.
Backing and Funding
Fueling its expansion, Obligate secured $4 million in funding from Circle Ventures and Blockchange Ventures earlier this year, following a $4.5 million investment round from Earlybird Venture Capital alongside SIX Fintech Ventures. These strategic investments underline growing confidence in blockchain’s role in reshaping debt markets.
