Obligate utilized the Polygon blockchain to issue bonds, bypassing traditional banks. Muff Trading AG, a Swiss metal sourcing firm, issued these bonds via the Obligate marketplace.

Details of the issuance size and terms are undisclosed. This move coincided with Obligate's public platform launch on March 27, 2024, offering businesses the ability to issue bonds and commercial papers independently of banks using blockchain technology. It marks a fusion of smart contracts with traditional finance in the era of neobanking.

Investors receive ERC 20 tokens in exchange for bonds, usable as collateral or for payment upon maturity. This decentralized finance trend hints at a growing market for on-chain debt trading, facilitating direct connections between issuers and investors while eliminating intermediaries.

Notably, Siemens, a renowned German firm, issued $64 million in bonds on Polygon, showcasing blockchain's potential to democratize bond market access. Muff Trading's debut bond issuance via Obligate signifies a departure from reliance on traditional banking, with an issuance fee of 0.5% deducted from the debt amount. The use of USDC stablecoin from Circle secures Muff Trading AG's debt against receivables from Apex Group, an Obligate corporate partner with $200 billion in assets.

This adoption of blockchain for bond issuance reflects the current market's challenges in conventional lending channels.