Update
Bermuda Issuance of Tokenized Catastrophe Bonds
Harneys, a Bermuda-based law firm, and tokenization platform dropRWA plan to issue tokenized catastrophe bonds early next year. These bonds aim to address the insurance gap for disaster risks that remain costly to insure. The tokenized structure seeks to make catastrophe bonds more accessible to smaller investors, potentially reducing the minimum investment threshold from $250,000 to accommodate smaller beneficial interests. The proposal is designed to comply with securities, insurance, and investor-protection rules. This move aims to expand the market for catastrophe bonds, which currently have a market size of $65.6 billion and saw new issuance reach $11.3 billion in the second quarter of 2023, the largest quarterly total on record. The tokenized structure does not alter the financial risk or the coverage provided by the bonds, but it could make the market more inclusive for a broader range of investors.