Proof-of-Concept Case Studies of Libeara Technology

On February 2023, Libeara conducted a test exercise to replicate the real bond lifecycle of Ghanaian government bonds, involving everything from creation to retail investor onboarding, account creation, and an entire slew of transactions both within the Libeara platform and with Ghanaian Mobile Money wallets.

Participants included employees of Standard Chartered Bank (“SCB”) Ghana, SCVentures, ITConsortium, as well as international volunteers. The test successfully simulated key processes including the uploading of mock identity documents*, frontend interactions, API connectivity, and backend functionality.

*Testing did not require participants to input any real personal information or data.

Based on the Stellar Network, Libeara allows the Ghanian population to access a broad range of retail sovereign bonds via public and private blockchains that are more flexible, interoperable, and cost-effective than traditional centralised solutions. More importantly, the Libeara platform maintains user privacy and allows the Ghanian financial ecosystem to leverage fintech innovations in real, valuable, and compliant ways that benefit investors, asset issuers, and the nation.

A Libeara prototype was developed as part of Project Genesis in collaboration with the Hong Kong Monetary Authority (HKMA) and Bank of International Settlements (BIS), the latter’s first green finance project exploring new opportunities in green bond tokenisation.

On top of improving investor participation by streamlining the bond issuance and lifecycle processes, the project also aims to facilitate direct exchange between asset holders, track the green impact of invested funds, and lower investment barriers by allowing smaller minimum allocation sizes.

With further optimisation, the ledger-facilitated tokenisation process can reduce complexity, and by extension cost, within direct exchange processes. This is in contrast to existing payment infrastructures such as the Faster Payment System, which is hampered by technical complexity despite being incredibly stable.

On the flip side, the prototype allowed for digital assets issued by the Hong Kong government as well as path integrations with financial infrastructure of the Hong Kong Stock Exchange (HKEX) to be concept-tested. By allowing retail investors to conduct direct secondary market exchanges using the underlying ledger infrastructure, the prototype was considered to be a successful proof-of-concept.

The Libeara solution received international-level endorsement when SCB presented their tokenisation solution and emerged as one of the 15 finalists out of over 300 international participants in the Monetary Authority of Singapore’s (MAS) Global Central Bank Digital Currency (CBDC) Challenge.

Finalists were selected by an independent panel of judges comprising policy and technical experts, academia, and senior representatives of international organisations, who evaluated solutions based on their ability to address 12 problem statements relating to financial inclusivity, interoperability, and programmability.

The accomplishment saw Libeara technology fast-tracked for grant applications of up to S$200,000 under the MAS Financial Sector Technology and Innovation (FSTI) Proof-of-Concept Scheme.

As a finalist, the Libeara development team supporting SCB underwent an eight-week Acceleration Phase supported by Tribe Accelerator, where they refined their solutions based on masterclasses from industry experts and with tools from the API Exchange (APIX) Digital Currency Sandbox. They then pitched their solutions to a panel of judges at the 2021 Singapore FinTech Festival, the world’s largest fintech event and community of technopreneurs, policymakers, industry leaders, academics, and private equity players.

Libeara’s tokenisation technology facilitated the digital tokenisation of retail bonds between Union Bank of the Philippines (UnionBank) and Standard Chartered Bank (SCB). In total, PHP 9 billion worth of bonds with 3 and 5.25-year dual tranche were issued on public ledger. While the tokens issued mirrored traditional transactions, they were not allocated directly to investors.

This arrangement defied traditional bond infrastructure, where retail investors are locked out of trade bonds due to complex multistep processes in buying and trading bonds. The UnionBank’s Online Bond Reservation portal became the Philippines’ first digitally enabled platform to bypass this by offering round-the-clock access to paperless account verification, client suitability assessment, application, and bond purchase. This granted retail investors access to issuers and allowed them to reap the full benefits of their investments.

With incumbent banks and governments backing the new streamlined process, investment accessibility will likely see further development in the near future. Both participating banks hope to further democratise bond investments by taking this successful proof of concept even further, with a long-term vision of eventually empowering investors to buy and sell bonds on secondary markets through their smartphones.