South Korea's Hana Bank, one of the country's major commercial banks, has issued a five-year, $100 million foreign-currency digital bond using Euroclear's blockchain-based platform, according to a Monday report by the Yonhap News Agency.

The bank carried out the issuance through Euroclear's Digital Financial Market Infrastructure, in what Yonhap described as the first digital bond issuance in South Korea to directly use Euroclear's blockchain infrastructure.

According to the report, the bond's issuance, registration and settlement were all processed on a distributed ledger network. Using the technology for bond allocation and payment settlement reportedly shortened the process from the typical three to five business days to the same day. The gap matters because, in conventional bond markets, the days between a trade and final settlement leave counterparties exposed to each other's credit risk.

The digital bond also connects to Euroclear's existing global settlement network, allowing investors to trade the security through their existing accounts and trading systems, Yonhap said. That means the security can be held and traded through the same channels as conventional bonds, without investors needing direct access to blockchain systems of their own.

Cointelegraph was unable to reach Hana Bank for comment, while Euroclear had not responded to Cointelegraph's request for comment before publication.

Euroclear's digital securities push

The issuance builds on Euroclear's broader push into digital markets. The Brussels-based clearing house, which specializes in settling cross-border securities transactions, launched its Digital Securities Issuance service in October 2023, settling a 100 million euro ($106 million at the time) digital bond issued by the International Bank for Reconstruction and Development, the World Bank's lending arm. That three-year bond raised funds for sustainable development and was listed on the Luxembourg Stock Exchange.

The transaction also adds to a growing series of bond issuances executed on distributed ledger technology, as banks and market infrastructure providers worldwide pilot digital securities to shorten settlement cycles and streamline post-trade processes. Similar digital bond projects have been carried out in recent years by supranational issuers, governments and commercial banks exploring distributed ledger technology for debt issuance. As the first South Korean issuance to run directly on Euroclear's blockchain infrastructure, the deal gives other domestic issuers a reference point when weighing the technology for their own debt programs.

Euroclear has meanwhile expanded into Asia, making its first investment in the region with a stake in Marketnode, a Singapore-based blockchain venture — a first regional investment that now coincides with the first South Korean digital bond issuance to run directly on its blockchain infrastructure.