B2C2 Issues First Onchain Corporate Bond

B2C2, an institutional crypto liquidity provider, has issued its first onchain corporate bond, as announced to The Block on Thursday. The bond was issued in partnership with onchain debt capital markets house, PV01, founded by B2C2’s founders.

The bond is tokenized on the Ethereum blockchain and denominated in USDC stablecoin. Its entire lifecycle, from issuance to redemption and secondary transfers, occurs entirely onchain.

The firms referred to the situation as “a world first” noting that the asset is “documented under English law.”

Max Boonen, founder of PV01, stated:
> “Crypto corporate bonds are our strategy’s natural next step after our U.S. Treasury-backed bonds. Crypto issuers will demonstrate that debt can be issued, traded and redeemed on the blockchain without so many intermediaries. This will pave the way for traditional companies to issue debt onchain.”

This transaction builds on PV01’s previous $5 million Treasury tokenization proof-of-concept carried out in partnership with B2C2, BlockTower Capital, and Keyrock in April 2024. It remains unclear how much debt was issued this time.

Unlike tokenized Treasury products like BlackRock’s BUIDL, PV01’s offerings are bonds rather than funds. The firm uses a special purpose vehicle to acquire a U.S. Treasury bill and issue a token that represents the bond. This token serves as both a representation of a bond and as a bond itself.

A PV01 representative remarked,
> “The landmark transaction is the first of many more to come, making it easier for digital asset companies to issue debt and one step closer to bringing the debt capital markets onchain.”

B2C2 was founded in 2015 by Max Boonen and Flavio Molendin and was acquired by Japan’s SBI in 2020. Boonen and Molendin later established the Bermuda-based broker-dealer PV01 three years afterward, focusing on digital bonds and handling structuring, book-building, and sales processes.

The startup, which targets qualified non-U.S. investors, raised $9 million in seed funding from Tioga Capital, BlockTower, and Ryze Labs.

Advocates argue that tokenized bonds can lower issuance costs, reduce transaction fees, and expedite the process, making it more transparent. 21.co predicts the real-world asset industry could reach $10 trillion by the decade’s end.

Several financial institutions have begun exploring blockchain for bond issuance. In 2023, Société Generale issued its first green euro-denominated bond on Ethereum, while German industrial giant Siemens AG issued a 300 million euro digital bond in September as part of a European Central Bank CBDC pilot.

The PV01 rep concluded,
> “The Tradfi Debt Capital Markets model is long overdue for an upgrade, with a clunky issuance process, designed for select privileged clients, lengthy clearing and settlement processes, and high costs.”