The financial sector in Qatar has achieved a new milestone because Doha Bank was able to complete a digital issuance of the bond based on the distributed regime with the aid of distributed ledger technology. The $150 million offering indicates increasing institutional trust in digitized capital market instruments and gives an indication of the desire of Qatar to modernize its financial infrastructure. The transaction is posted on a regulated digital platform, and not on a decentralized blockchain, but this indicates how traditional banks are embracing innovative technologies whilst still having regulatory certainty. The step will position Doha bank in a better place of funding diversification strategy, increase efficiency of settlement, and establish Qatar as an innovative center of digital finance in the Middle East. For more news updates, visit our Gulf Independent News page.
Doha Bank’s Landmark Digital Issuance
Doha Bank is one of the largest private commercial lenders in Qatar that has issued a $150 million floating-rate digital bond also referred to as Digitally Native Notes (DNN). This was issued on the London Stock Exchange via Euroclear Digital Financial Market Infrastructure (D-FMI) which is a privately run DLT infrastructure with the same institutional grade digital securities.
The transaction was settled on the same day (T+0) and counterparty risk and collateral requirements were significantly lowered. Doha Bank was able to increase liquidity and efficiency in operations by capitalizing on private DLT to allow investors to reuse their funds instantly. This is the first significant move by Qatar in mainstream adoption of digital bonds and strengthens the argument of credibility of the Qatar digital bond market.
Strategic and Regulatory Alignment
As stated by the CEO Sheikh Abdulrahman Bin Fahad Al-Thani, the issuance reinforces the strategy of Doha Bank to diversify and consolidate its financing base besides appealing to new investors in the world. The program is clearly in line with the Third Financial Sector Strategy of Qatar Central Bank and the digital transformation agenda of the government in general.
Standard Chartered played the role of the sole coordinator and arranger in the whole world, and Citi was the issuing and paying agent. The Hana Securities of South Korea was the only investor that further highlights high international interest in exposure to the Qatar digital bond ecosystem through regulated digital infrastructure.
Why Institutions Prefer Private DLT
Certain financial institutions globally are showing preference to privately issued digital bonds using private DLT networks more than on public blockchains. Such systems provide more legal control, finality of transaction, and simplified Know Your Customer (KYC) and anti-money laundering (AML) compliance. They also have a greater integration with the existing financial rails which are already in control of institutions.
The D-FMI by Euroclear has become a monopoly with a cumulative total of over $1 billion of digital bonds issued since the first in the history of the World Bank in €100 mm. This has been emulated by major issuers like the Asian Infrastructure Investment Bank and Caisse des Dépots, which confirms the scalability and reliability of the model in the context of the Qatar digital bond story.
Balancing Innovation and Control
Although private DLT is efficient and resultatively comfortable, it has been challenged as restricting open innovation and competition over public blockchains. However, in the case of such banks as Doha Bank, regulated digital spaces provide a middle ground between technological progress and organizational regulation, which is why they are the best option to digital capital markets in the modern world.
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