“The token would not simply point to a bond held somewhere else,” Henry Mander, partner and global head of trusts and private wealth at Harneys, said in an interview. “Under the structure the firms have developed in Bermuda, the investor would hold legal title to the bond.”
That matters because “the investor register, eligibility checks and payment process would sit on the same legally enforceable system, rather than alongside an offchain ownership record,” Faisal Monai, CEO and co-founder of droppRWA, told CoinDesk. The system could reduce reconciliation from days to seconds, provided it receives the necessary regulatory approvals.
Financial firms are already moving beyond tokenizing conventional assets and starting to test blockchain systems for issuance, ownership and settlement. The market for tokenized assets has nearly tripled over the past year to more than $33 billion, according to RWA.xyz. Citi estimates the sector could reach $5.5 trillion by 2030.
Catastrophe bonds are a $65.6 billion market used by insurers, reinsurers and government entities to transfer a portion of their exposure to natural disasters to capital market investors.
The investors receive coupon payments, typically a floating money-market return on the collateral plus a risk spread, but have to pay out if a qualifying event occurs. That attraction is returns uncorrelated to financial markets, economic cycles or political events.
