Singapore-based bond exchange, BondEvalue, developed by India-origin entrepreneurs, is targeting to launch a blockchain-platform in the New Year to facilitate investment in bonds by individuals and common man.
"We are talking to two leading banks in India to launch the blockchain-platform early next year," Rahul Banerjee told on Sunday after getting approval as a global Recognised Market Operator (RMO) from the Monetary Authority of Singapore (MAS).
The RMO allows BondbloX Bond Exchange (BBX), the world's first blockchain-based bond exchange, to trade globally a wide range of fixed-income securities to the mass markets.
"BondEvalue officially graduated from the MAS' regulatory sandbox on October 1, 2020. The move means that BondEvalue has successfully concluded proof of technology and business model," explained Banerjee, 45-year-old son of an air force officer who attained early education from Amritsar's Rajasansi town.
The MAS' approval will help to accelerate engagements with potential partners, said Banerjee who aims to re-boost common man's saving schemes in global markets.
"As a child, I remember that we had a Godrej steel almirah, where the locker would have the Kisan Vikas Patras, along with other valuables, birth certificates, etc," said Banerjee, remembering his childhood days. "Blockchain is today's financial Godrej steel almirah."
"My dream is to enable every Indian to buy bonds from their mobile phones the way they order food. One rupee, one bond," he said referring to the notional value of the bond.
"Our vision of extending bond trading from Wall Street to main street is becoming a reality. We are committed to helping investors trade bonds in a transparent manner," said Rajaram Kannan, a former banker and co-founder of BBX-BondEvalue.
Rajaram and Rahul were classmates in the founding batch of the Indian School of Business.
"The aim is to make it one of the most attractive schemes for the common man," he stressed, demystifying the notion that bonds are rich-man play.
"Going forward, we forsee active trading in rupee-denominated bonds including Masala bonds. The onshore Indian market with new issuance of USD 100 billion corporate bond market is huge," Banerjee noted.
He sees BondEvalue helping in the greater integration of the Indian bond markets with global markets. Resident Indians can buy US dollar bonds on the BondEvalue Exchange through the Liberalised Remittance Scheme which allows individual to remit up to USD 200,000 a year from India. Individuals will come via the Indian banks that become members on the exchange.
Banerjee said the bond market in its present form is "broken" because its over-the-counter trading lacks transparency. Exchange trading is the only solution. Only when stock trading moved to exchanges in the 1990s that real growth and retail participation surged, he added.
There were many previous attempts by regulators and market participants to 'democratise' bond investing but BondEvalue was able to make it happen largely because of three factors - advances in technology, the Singapore regulator approval, and the experience and expertise of his team at BondEvalue.
Today, bonds are popular with individuals in countries like the US, Japan and Singapore. Technology can create a second wave of allowing individuals to invest in bonds, similar to what the Kisan Vikas Patra's did decades ago, added the veteran bankers.