Bonds & Fixed Income Assets: The Right Tokenization Model

In the global capital market structure, the typical recurring cash flow asset group, bonds, is often considered the stable foundation of many portfolios. In Vietnam, after a period of rapid growth and then strong adjustment, the need for “transparency – standardization – digitization” of information related to bonds and fixed cash flows is becoming increasingly urgent. Recent technology trends can attach each economic interest to an “electronic identifier” and automate the reconciliation and payment process—thereby supporting consistent information disclosure, reducing manual operations, and increasing cross-checking capabilities.

What are fixed income assets?

Depending on the legal framework and issuance conditions, fixed cash flows can come from many sources. Corporate bonds offer high expected returns but come with risks depending on the financial health of the issuing company, the level of information disclosure, collateral and accompanying commitments.

In addition to bonds, components such as leases (vehicles, machinery, equipment, premises), receivables from invoices or supply contracts, and recurring cash flows from services/system maintenance are also sources of cash flows that can be standardized for consistent monitoring, reconciliation, and payment. When information about these cash flows is standardized at the source, risk assessment, internal ratings, and control of capital usage become more feasible.

Strong growth potential when properly “Tokenized”

First of all, information is often scattered in the form of paper documents or separate files, making it difficult for investors to compare and check. Standardizing transaction - payment - commitment data using digital infrastructure helps to display the principal/interest payment schedule and the status of obligations in a timely manner, creating conditions for independent checking, reconciliation and auditing.

Second, fraud often arises from the absence of mechanisms to control the purpose of capital use and the lack of updated data. When the flow of money is designed to “pass” through the automatic payment mechanism according to smart contracts or equivalent business rules on the system, the misuse will be easier to detect. Here, “automated” should only be understood as the automation of technical processes according to signed contracts and within the scope of law.

Third, SMEs often struggle to access large-scale issuance channels. Digitizing due diligence, cash flow, and disclosure data can help shorten processing times, thereby expanding access to institutional investors or the right distribution platform—provided the product structure meets the right legal standards.

Fourth, in terms of secondary trading, digital infrastructure enhances the ability to transfer within legally permitted timeframes, conditions, and mechanisms, improving flexibility within compliance.

Finally, when data standards are applied consistently, multiple types of fixed cash flows such as receivables, leases, revenue sharing, mining rights, etc. can be integrated into the same governance framework—thus forming a standardized and auditable cash flow ecosystem.

Some cautious implementation models in the context of Vietnam

1) Corporate bonds with “electronic identification” for rights

Each economic interest (principal, interest, payment schedule) is linked to a unique electronic identifier for tracking and reconciliation. If issued to the public or offered privately, the records and procedures must fully comply with securities regulations and information disclosure, carried out through intermediaries with functions as prescribed. The technological approach only plays a role in supporting transparency, and must comply with the legal framework when testing.

2) Standardize – track receivables

Invoices and service contracts are standardized in data, which allows for tracking of payment progress and disbursement flows. The legal classification of the product structure depends on the specific design and applicable legal basis; expert and/or competent authority consultation should be sought before implementation.

3) Cash flow from lease contract

Recurring collections can be incorporated into a schedule-based automated tracking, reconciliation, and payment mechanism, reducing operational errors. Likewise, the legality of each component depends on the contract, underlying assets, and applicable regulations.

Reference process

A prudent roadmap typically includes: due diligence of the underlying business and assets; risk quantification and monitoring metrics; design of the benefit structure and payment schedule; development of technical mechanisms to lock cash flow/contractual payments; disclosure of information on appropriate distribution systems; transparent monitoring – reporting and early warning; and finally, support for secondary transfers within the permitted framework. At every step, compliance with legal regulations related to securities, civil, accounting – auditing, anti-money laundering and professional guidelines of competent authorities is a prerequisite.

Expected benefits

For businesses, transparent data and cash flow discipline can help optimize the cost of capital and improve investor confidence. For buyers of financial products, consistent disclosure mechanisms make it easier to track payment obligations, thereby supporting prudent investment decisions. At the market level, data standards and automated monitoring help reduce information asymmetries, contributing to rebuilding confidence after events.

Conclude

The period 2025–2035 may see the restoration of order in the corporate bond market and the need to digitize data to make cash flow transparent. A safe approach is to focus on data standards – electronic identification of benefits – automatic payment mechanisms according to contracts – continuous information disclosure, developed in line with the enabling legal framework. 

This series of articles is for sharing knowledge and information, not for investment recommendations or financial product offerings, not for legal analysis or predictions, but focuses on sharing about technology, economics, and investment. The contents referring to regulations, if any, will be written based on existing legal principles, the parts without detailed regulations will be explained and mentioned based on experience in countries that have implemented them in practice. Readers need to proactively read and understand the current policies and legal framework of Vietnam through official documents; at the same time, need to comply with the current legal framework and only operate when specifically licensed, cautiously and responsibly towards the State, community, and society.