Canada has completed a pilot program to test the use of distributed ledger technology in bond markets, culminating in the issuance of the country’s first tokenized bonds, according to an announcement from the Bank of Canada on Friday.
The experiment, known as Project Samara, involved the Bank of Canada, Export Development Canada, Royal Bank of Canada and TD Bank Group and investigated whether a blockchain-style infrastructure could streamline bond issuance, trading and settlement.
As part of the test, Export Development Canada issued C$100 million ($73.6 million) in bonds with maturities of less than three months to a closed group of investors. Securities were issued, traded and settled on a distributed ledger platform, and payments were processed using bulk deposits at central banks rather than cash from commercial banks.
The platform, built on Hyperledger Fabric, allows participants to manage the entire cycle of securities, including issuance, tender, coupon payments, purchase and secondary trading, while integrating separate ledgers for cash and bonds to enable instant settlements.
The pilot highlighted the benefits of adopting distributed ledger systems for capital markets. Participants reported improvements in operations and data integrity, but also identified management, regulatory and integration challenges.
The researchers said the results showed that distributed ledger systems could improve settlement efficiency and reduce counterparty risk, although broader adoption could be slowed by infrastructure and regulatory hurdles.
related to: An attempt to reserve Bitcoin in Vancouver is facing resistance from city officials
Tokenized bonds attract interest from governments and banks
Canada’s pilot program adds to a growing list of experiments by governments and financial institutions that are exploring how blockchain-based systems can transform the issuance of traditional financial assets.
The first example was in 2018, when the World Bank issued a two-year “Bond-i” credit facility with a maturity of 110 million Australian dollars, arranged by the Commonwealth Bank of Australia. The issue is widely considered to be the first bond to have its creation, distribution and lifecycle management recorded on the blockchain.
In 2022, the Monetary Authority of Singapore launched Project Guardian to explore how distributed ledger technology can be used in wholesale markets. Early industry pilots explored decentralized finance applications for lending and borrowing bonds and deposits on public blockchains.
In 2023, Hong Kong issued green bonds using a distributed ledger infrastructure, which was facilitated by the Hong Kong Monetary Authority. The program was expanded with additional digital bond offerings in 2024 and 2025.
The World Bank has issued Swiss Franc Digital Bonds on the SIX Digital Exchange in 2024 with settlement using the central bank’s wholesale digital currency provided by the Swiss National Bank.
Magazine: A crypto lawyer warns that the Transparency Act risks repeating Europe’s mistakes
