Max Boonen’s PV01 Tokenizes $5M Treasury Bill, Plans to Look at Corporate Bonds

PV01, a company specializing in tokenization and led by the founders of crypto market maker B2C2, announced the successful completion of its initial bond sale using English law on Tuesday. This significant milestone brings PV01 closer to achieving its objective of establishing a bond market built on blockchain technology – encompassing corporate debt offerings.

A digital representation of a $5 million U.S. Treasury bill from April 8, which was redeemed a week later, existed on the Ethereum blockchain as an asset. This token was backed by the original bill and attracted investments from market makers B2C2, BlockTower Capital, and Keyrock during PV01’s experimental issuance.

Max Boonen and Flavior Molendini, the founders of Bermuda-based PV01, emerged from stealth mode a year ago, leading the company. Previously, they founded B2C2. They’ve entered the competition to bring real-world assets like Treasuries and bonds onto the blockchain. The goal is to make transactions less costly, quicker, and more transparent. According to digital asset manager 21.co’s prediction from last year, the market for tokenized real-world assets could grow up to $10 trillion as traditional finance institutions adopt this technology.

Making debt transactions on the blockchain could have prevented the crypto industry’s credit crisis in 2022, which involved the collapse of hedge fund Three Arrows Capital (3AC) and lender Celsius Network. By using transparent public ledgers, the extent of debts within the system would be visible, and it would be clear who owed money to whom. According to Max Boonen, co-founder and CEO of PV01, he made this statement during an interview with CoinDesk.

Last year saw a significant surge in the demand for digitized Treasury bonds, reaching over $1 billion in value. Notable industry heavyweight BlackRock has lately entered this competitive arena, teaming up with Securitize.

PV01 sets itself apart from competitors by having its token represent the entire bond, including its lifecycle, on the blockchain. In contrast, many rivals create tokens that function as wrappers for money market funds, adding an extra intermediary layer in the process. For PV01’s future goals of issuing corporate bonds directly on the blockchain, eliminating this intermediate step is a crucial design choice, Boonen pointed out.

The tokens can be passed among buyers and sellers, enabling transactions and determining prices in secondary markets without requiring any exchanges or redeeming them first.

Market makers are eager to offer on-demand liquidity for Treasury bond tokens since they aim to utilize these tokens as collateral for their trading transactions, mentioned Booen.

Following the initial offering, Boonen announced that PV01 intends to increase the size of its tokenized Treasury product in the near future and explore corporate bond offerings as part of their growth strategy in the longer term.

In the upcoming months, we plan to collaborate with a renowned cryptocurrency company for the on-chain issuance of a legitimate corporate bond by them. (Boonen’s statement paraphrased)