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Lugano adopts pioneering role in the area of digital bonds

The City of Lugano has placed a digital bond worth 100 million Swiss francs based on blockchain technology on the SIX Digital Exchange, a Swiss securities exchange. With this world first, Lugano is strengthening its innovation model that aims to promote the digital transformation and innovation.

The City of Lugano has placed the first native digital bond ever to be issued on regulated financial market infrastructure.
The City of Lugano has placed the first native digital bond ever to be issued on regulated financial market infrastructure. Image credit: SamuelFerrara, CC BY-SA 4.0 via Wikimedia Commons

The City of Lugano has placed the first native digital bond ever to be issued on regulated financial market infrastructure (FMI). The senior unsecured bond has a total issue volume of 100 million Swiss francs with a term to maturity until 2029. The city processed the issuance, which is based on blockchain technology and is fully regulated, via the world’s first digital platform, the SIX Digital Exchange (SDX), further details of which can be found in a press release.

This transaction firms up Lugano’s strategic alignment, according to which it is seeking to become an innovation model and “to promote the digital transformation, technological innovation, development and research with the aim of being a pioneering city”. With its “Plan B” initiative, Lugano is already actively promoting the use of blockchain technology.

In its own press release, the SDX offered a warm welcome to Lugano, with Michele Foletti, Mayor of Lugano, stating that the city is “a pioneer in the Blockchain space and aims to become an international center of excellence for blockchain and crypto adoption”. With this bond issuance, Lugano is underlining its “role as a leader for innovation across the public sector and the learning effects will be far reaching”, Foletti concludes.

Michael Wölfle from Zurich Cantonal Bank (ZKB), the sole Lead Manager and Arranger, is “very happy with the outcome of this landmark transaction and world first for City of Lugano”. The strong level of investor interest and placement with just under 20 investors shows that this format is being “ever more widely accepted as an alternative to conventional bond issues”. David Newns, Head of SIX Digital Exchange, explained that SDX is “really proud” to play a part in the city of Lugano’s “Plan B” initiative.

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