BNY Investments has tokenized its short-dated high yield bond in partnership with OpenEden, a real-world asset tokenization platform. Dubbed HYBOND, the product is intended to provide 1:1 exposure to BNY investment’s underlaying corporate bond strategy directly to on-chain users.
In a statement shared with Coin Headlines, Singapore-based OpenEden said that HYBOND will help eligible investors move beyond cash-equivalent and government bond products.
As per Jeremy Ng, Founder and CEO of OpenEden, HYBOND will play a pivotal role in bringing actively managed corporate bond exposure to the blockchain ecosystem.
BNY Investments’ Global Short-Dated High-Yield Bond strategy is a type of credit investment that is designed to generate higher returns for investors compared to government bonds. It focuses on bonds that have a shorter maturity timeframe, mostly within one to three years.
Source: BNY
“By working with BNY Investments, we are offering qualified investors access to top-tier fixed-income strategies combined with the programmability that digital asset infrastructure provides,” Ng said.
The tokenized product is built on the Ethereum network, touted as the most commercial blockchain in existance.
In the first phase of the launch, the product will be made available to only select institutional investors. While BNY does plan on rolling out BYOND to all of its institutional clients soon, no specific timeline has been shared for a wider release as of now.
The launch of HYBOND is also being seen as a milestone in expanding traditional investment options on blockchain.
Doni Shamsuddin, Head of Asia Pacific, BNY Investments added to the announcement saying that the development “deepens our relationship with OpenEden by extending our time- tested fixed income management capabilities into the tokenized market.”
The market for tokenized bonds is fairly young and niche. The future projection of this market, however, looks promising.
In January this year, a blog by the World Bank had said that the $3.7 billion worth of fixed income instruments were globally issued on blockchains in 2024. Compared to the $100 trillion global bond market, the blog said, tokenized bonds make for merely a drop in the ocean.
However, World Bank also said that “we are at the beginning of a massive transformation”, citing analysts’ prediction that tokenized securities could hit $22 billion annually in the next four years leading upto 2030.
Source: World Bank