MP Janusz Kowalski decided to ask the Polish government whether it intends to keep up with the times and tokenize Polish bonds. It turns out that there is no chance of this happening. Why? The answer shows the mentality of the people who rule us.
Kowalski asks the government
MP Janusz Kowalski decided to ask the Polish government whether it plans to tokenize State Treasury bonds.
Tokenization of bonds could constitute a tool for opening the public debt market to new groups of investors – in particular the so-called digital generation and crypto-native investors. Additionally, the use of not only the tokenization mechanism, but also the use of blockchain technology itself in combination with the so-called “oracle” mechanisms and escrow contract terms structured within smart contracts could facilitate cross-border settlements in sectors especially such as commodity trading. The economic sense of such solutions is unquestionable – however, it requires ensuring an appropriate level of legal certainty and compliance with regulations, including AML/CFT
– he argued (editor’s emphasis).
The government says “no”
However, it turns out that the Polish government (specifically: the Ministry of Finance) is not interested in innovations:
The Ministry of Finance does not currently plan to implement the tokenization project for Treasury savings bonds.
It is necessary to run any infrastructure using distributed ledger technology appropriate authorization issued by the Polish Financial Supervision Authority. There is no public information that entities operating on the capital market in Poland have such permits. Therefore, considering the issue of tokenization of treasury bonds in the regime of the above-mentioned regulation is essentially pointless
– we read in response to interpellations.
However, the deputy minister’s arguments do not end there:
Regardless of the above, it is not reasonable to conduct the tokenization process, i.e. giving treasury bonds a digital form or in another formula, due to the specific nature of savings bonds and the costs associated with introducing a solution based on distributed ledger infrastructure.
When designing retail savings instruments and their distribution channels, an important issue to take into account is that investors
Retail customers, especially households, prefer safe and simple financial products. These are mostly retail investors who usually they invest smaller amounts and do not have specialist knowledge of financial markets. Therefore, both savings products and their distribution system should be safe and uncomplicated
As you can see, there is no point counting on tokenized bonds. However, the deputy minister’s response is sad: MP Kowalski clearly wrote in his interpellation that his goal would be to expand the group of investors who buy bonds to include young people. It was simply about looking for new groups that would invest in Polish bonds. Drop replied that this did not make sense because current investors would not be interested in such a solution. This is the behavior of a CEO with narrow horizons who does not want to expand his customer base.
