Harneys and droppRWA plan to issue blockchain-secured catastrophe bonds, aiming for early 2027, with potential investment minimums reduced significantly.
Law firm Harneys and the droppRWA platform are set to issue catastrophe bonds secured by blockchain technology, as revealed in a recent interview with CoinDesk.
These bonds, commonly used by insurance companies and governments, allow for the transfer of risks from natural disasters to investors. The global market for catastrophe bonds is valued at around $65.6 billion, with investors holding these bonds until specific events, such as hurricanes or earthquakes, occur.
The first transaction involving these tokenized assets is planned for early 2027.
Edwin Mata, CEO and co-founder of Brickken, highlighted the importance of blockchain serving as a legal record of ownership. He noted that while tokenization is innovative, it does not influence the evaluation of catastrophe risk or the bond's valuation.
Faisal Monai, co-founder of droppRWA, discussed the potential for a streamlined system that could integrate investor registries, eligibility checks, and payout processes into a single legally binding framework, potentially reducing verification times from days to seconds.
The partners are also exploring ways to make investments more accessible. Instead of the standard minimum purchase of $250,000, they aim to offer beneficial interests that would allow investments as low as $5,000.
In the second quarter of 2026, catastrophe bond issuances totaled $11.3 billion across 48 transactions, with the Bermuda Stock Exchange responsible for 93% of global issuance in 2025, totaling $70.5 billion in cat bonds and insurance securities.
The tokenized asset market has seen significant growth, nearly tripling to over $38.5 billion in the past year, according to RWA.xyz. However, the IMF has raised concerns about the risks of tokenization, warning that without common standards, it could lead to increased market fragmentation and systemic risks in the financial system.
