Bank of Canada completes DLT-based bond issuance experiment

The central bank has been working with RBC, TD Bank and Export Development Canada (EDC) on Project Samara, an initiative to evaluate how tokenisation and DLT can improve bond issuance and settlement in a real-world setting.

This week, the project hit a key milestone, with EDC issuing the tokenised bond, which was sold and traded, and will be managed throughout its life cycle, on the Samara platform.

The Samara platform was designed for the experiment to support end-to-end transactions throughout the bond’s life cycle—including cash and bond issuance, bidding, coupon payment, redemption and secondary trading—on DLT infrastructure.

Built on Hyperledger Fabric, the platform integrates separate bond and cash ledgers and enables the transaction to be settled instantly, as well as secondary market trading and settlement of the tokenised bond, directly on-chain.

Building on earlier experimental work from the series of Jasper projects, Samara tested the real-world feasibility and implications of a DLT-based platform for capital markets, using a real bond funded and traded with central bank money.

The project was structured as a limited experiment, involving the issuance of a single security — a $100 million Canadian dollar - denominated bond of less than 3 months — to a closed investor group.

The Bank of Canada says the experiment demonstrated efficiency gains across participants, with both operational efficiency and data integrity improved, and workflows streamlined. However, this was partially offset by system complexity, liquidity costs, the need for new governance structures, and increased attention in coordination, reporting and oversight.

Meanwhile, counterparty and settlement risk were reduced, but new operational risks related to technology, auditability and fallback mechanisms were introduced.

Overall, the central bank says that “despite technical feasibility, broader adoption will likely be slow due to several factors, such as integration challenges and limited appetite for core infrastructure changes”.