On August 23, 2022, the IDB Group, made up of the Inter-American Development Bank, IDB Invest, IDB Lab, and Banco Davivienda, announced the issuance of a bond within Blockchain in Latin America and the Caribbean, as a limited pilot within the Colombian regulatory Sandbox. This is how Colombia Fintech communicated through its website.
The issue completed the processes of authorization, initial registration and subsequent cancellation of the registration of the bond in the National Registry of Securities and Issuers (RNVE), as well as the issuance, negotiation, registration of payments and fulfillment of the bond entirely in blockchain. This allowed to test improvements in times and costs in a complete negotiation cycle in the Colombian capital market.
The bond, fully subscribed by IDB Invest, had a total issue amount of 110 million Colombian pesos (approximately USD 25,000.00), and was purchased by IDB Invest through a transaction carried out on the LACChain blockchain network, (infrastructure enabled by IDB Lab as a regional public good). The pilot was carried out within “the sandbox”the Sandbox of the Supervisor of the Financial Superintendence of Colombia (SFC) for testing innovations in financial technology (fintech) and had the logistical and regulatory support of the IDB Group.
The Bank of the Republic of Colombia, the Central Bank of the country, and the Financial Superintendence of Colombia (SFC) They had supervision nodes at all times that allowed them to monitor all the processes of the negotiation cycle and fulfillment of the bond.
Javier Suárez, President of Davivienda pointed out: “Davivienda has been one of the pioneers in working with blockchain technology in Colombia. On this occasion, we are very happy to be able to announce the success of this first pilot, which we had the opportunity to develop together with such important allies. The use of this technology transforms the role of actors in the securities market and the way in which bonds are issued and processed, resulting in a more transparent, fast and secure market. This favors the reduction of costs and the complexity of emissions, allowing the entry of more and more participants. In this way, the success of this pilot means an opportunity to continue working for financial inclusion, this time from the stock market.”.
Kelvin Suero, Acting Representative of the IDB Group in Colombia said: “This is an example of how the work between the IDB Group and the public and private sectors of the countries can lead to innovation in the capital markets. The pilot opens the door to fundamental changes in the existing precepts in securities trading and allows new models to be explored in the future to generate more financial inclusion. We hope that similar pilots can be replicated in Latin America and the Caribbean”.
The pilot had the work of a multidisciplinary team that included financial, operational, technological, legal and regulatory solutions to be able to conclude successfully. Its implementation allows us to understand the benefits of using new decentralized technologies such as blockchain.
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