This is Part II of a two-part article that examines the emergence of Digital Bond offerings. Part I provided a high-level overview of Digital Bonds and the growing Digital Bond market. This Part II provides an overview of the technology powering this market shift, as well as certain regulatory and other considerations for capital markets participants.

Blockchain and Smart Contracts

Blockchain. A blockchain is a distributed database that maintains identical copies of discrete structured data or transactions referred to as blocks. The term blockchain is derived from the fact that this distributed database contains the complete sequence of transactions from the very first transaction (known as the genesis block) to the most recent one. The transactions are linked and collectively form a linked chain of structured data.