Digital Bond Breakthrough Sets Abu Dhabi Exchange Apart
ADX, the UAE's largest exchange and the second-largest in the Middle East and North Africa, is leading the effort to integrate tokenised financial instruments into its core infrastructure. The digital bond follows strategic collaboration among ADX, FAB and HSBC, combining regional reach with global digital issuance acumen.
HSBC Orion, which powers the issuance, is operated by the Central Moneymarkets Unit based in Hong Kong. This platform supports settlement via links to Clearstream and Euroclear, allowing both traditional custody participants and direct digital‐platform users to access the bond. Legal structuring has involved top-tier international firms to ensure regulatory compliance and governance integrity.
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Abdulla Salem Alnuaimi, ADX Group chief executive officer, hailed the development as a critical milestone in embedding blockchain solutions into capital markets and supporting Abu Dhabi's digital transition. He emphasised that this issuance paves the way for tokenised green bonds, sukuk and real estate-linked assets.
FAB Group CFO Lars Kramer highlighted the instrument's transformative potential, noting it advances the bank's digital strategy and provides investors with streamlined execution and settlement. He indicated that FAB is cementing its role as a pioneer in the region's digital asset ecosystem.
Supporting voices from HSBC echoed the sentiment. Mohamed Al Marzooqi, CEO of HSBC Bank Middle East, said the step demonstrates how tokenisation can reshape capital markets in the Middle East, enhancing transparency, efficiency and investor access. HSBC will act as global coordinator, lead manager and bookrunner, underscoring its comprehensive involvement.
Digital bonds, issued and recorded on blockchain, are designed to offer faster settlement cycles, reduced counterparty risk and improved security and transparency for institutional investors. ADX officials have emphasised that the exchange's post-trade systems are fully equipped to integrate with global settlement standards, ensuring interoperability and institutional confidence.
HSBC Orion has quickly emerged as a prolific platform globally, having issued several digital bonds in the past year, including a Luxembourg treasury note and a €100 million bond by the European Investment Bank settled using CBDC. The FAB issuance leverages the platform's Hong Kong-based CMU operations, benefiting from its connections to Clearstream and Euroclear.
FAB's digital ambitions extend beyond debt issuance. The bank is developing a Dirham stablecoin, has embraced China's digital RMB and is active in the mBridge cross-border CBDC initiative alongside central banks in China, Hong Kong, Saudi Arabia, Thailand and the UAE. These efforts underscore FAB's leadership in exploring blockchain applications across payments and capital markets.
Market observers see ADX's move as aligning with the UAE's ambition to diversify its economy and enhance its position as a technologically advanced financial hub. Integrating DLT-based bonds into mainstream markets supports national objectives of transparency, resilience and growth.
Institutional investors are expected to benefit from digital bonds through shorter settlement windows and simplified processes. Tokenisation can reduce manual reconciliation, lower operational cost, and establish immutable transaction records. Such innovations are gaining traction: ADX's listing follows a wave of global tokenised issuance, including recent bond sales via HSBC Orion.
Looking ahead, the ADX platform lies poised to host a wider array of tokenised assets. ADX has flagged plans for green bonds, sukuk, and securitised property instruments — potentially transforming regional capital markets into a hybrid of traditional and blockchain-enabled finance.
Global investors, whether viewing through conventional custodian channels or digital wallets, will have access to the bond via CMU, Euroclear, or Clearstream. Direct connection to HSBC Orion is also an option, ensuring flexibility in participation models. This dual-access framework is designed to attract both legacy institutional investors and early adopters of blockchain finance.
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