Key takeaways

• Government securities play a crucial role in the financial system – as a savings vehicle for households and firms, collateral in a range of transactions and a means of pricing assets.

• Despite their early stage of development ($8 billion in issuance to date), tokenised bonds have lower bid-ask spreads than conventional bonds and comparable issuance costs.

• Government bond tokenisation could improve market efficiency and support financial innovation, but its success depends on addressing regulatory and infrastructure challenges.