Africa Finance Corporation (AFC) has raised 350 million Swiss francs, worth roughly $431 million, through its first digital bond, marking a major step in the adoption of regulated digital securities across African capital markets.
The five-year bond was issued through Switzerland’s SIX infrastructure and uses distributed ledger technology for its registration, clearing and settlement. The transaction makes AFC the first African institution to issue a digital bond through both a regulated exchange and a central securities depository.
AFC raises $431M through digital bond
The bond carries a 1.4925% coupon and was issued under AFC’s $5 billion Global Medium-Term Note Programme. The digital security is listed on the SIX Swiss Exchange and deposited with SIX Digital Exchange (SDX).
Rather than using an open blockchain, the transaction relies on regulated financial-market infrastructure. Ownership records are maintained through a digital register, while SIX provides the trading, clearing and settlement framework.
AFC said the transaction attracted strong demand from Swiss investors, who accounted for approximately 90% of orders. International investors contributed the remaining 10%.
Banks and other financial institutions represented 57% of the order book, followed by asset managers at 37% and hedge funds at 6%.
The proceeds will be used for AFC’s general funding requirements and to support infrastructure financing projects across Africa.
Digital bond brings blockchain into traditional markets
The transaction demonstrates how blockchain technology can be incorporated into conventional securities markets without turning the underlying asset into an unregulated crypto token.
Investors are still purchasing a conventional debt obligation from AFC. The primary difference is how ownership, settlement and transaction records are maintained.
Banji Fehintola, AFC’s executive board member and head of financial services, said the digital format is part of the institution’s broader effort to diversify its funding sources and remain at the forefront of capital-markets innovation.
AFC President and CEO Samaila Zubairu said the transaction also reflected investor confidence in the institution. AFC currently holds an A rating with a positive outlook from S&P Global and an A3 rating with a stable outlook from Moody’s.
The digital bond follows AFC’s $500 million five-year senior unsecured Eurobond issued in July. The corporation said pricing for the digital transaction remained competitive with the earlier dollar-denominated benchmark.
Founded in 2007, AFC is a multilateral development finance institution focused on sectors including power, transportation, telecommunications, natural resources and heavy industry. It has 48 African member countries and says it has invested approximately $19 billion across the continent since inception.
SIX merges digital and traditional securities infrastructure
The AFC transaction comes after Switzerland strengthened the infrastructure connecting its traditional and digital securities markets.
In May, Swiss financial regulator FINMA approved the integration of SIX Digital Exchange AG into SIX SIS AG. The restructuring brought traditional and digital securities services under a single legal entity and also enabled crypto custody through the combined central securities depository.
SDX operates as a regulated market infrastructure for securities issued and settled using distributed ledger technology. Its previous transactions have included digital bonds issued by financial institutions and public-sector entities.
The platform also supported Lugano’s third blockchain bond in 2024, a 120 million-franc issuance listed on both SDX and the main SIX Swiss Exchange.
AFC’s transaction is significant because it demonstrates that digital bond issuance can operate within established financial infrastructure rather than requiring a separate crypto-native market.
Digital securities gain momentum globally
The development in Switzerland mirrors efforts in the United States to bring tokenized securities into regulated financial markets.
The Depository Trust & Clearing Corporation (DTCC) has been developing a tokenization service that could support assets including Russell 1000 stocks, major ETFs and U.S. Treasury securities. The initiative involves more than 50 financial and digital-asset companies, including major banks, asset managers, exchanges and blockchain firms.
The SEC has also emphasized that putting a financial instrument on a blockchain does not remove it from existing securities regulations. In other words, tokenization changes the technology used to represent and transfer an asset, not necessarily its legal classification.
This distinction is becoming increasingly important as financial institutions move beyond experimental blockchain projects toward regulated digital securities.
Why AFC’s digital bond matters
AFC’s $431 million issuance represents more than another bond transaction. It provides evidence that blockchain-based securities can be integrated into established capital-market infrastructure while maintaining conventional investor protections and regulatory oversight.
For African financial markets, the model could eventually reduce settlement friction, improve transparency and expand access to international capital.
The broader significance is that tokenization is increasingly moving away from purely crypto-native experiments and toward regulated financial infrastructure. If more governments, development institutions and large financial issuers follow AFC’s example, digital bonds could become a practical component of global capital markets rather than simply a blockchain proof of concept.
