ICMA publishes new paper on smart contracts and DLT-based fixed income markets
28 September 2026 The International Capital Market Association (ICMA) has today published a new discussion paper, “Smart contracts and DLT-based fixed income markets: What’s next?”, examining the growing role of smart contracts in distributed ledger technology (DLT)-based fixed income markets and the challenges that will need to be addressed as the market develops.
Smart contracts are increasingly being used to automate processes across the securities lifecycle, including issuance, settlement, servicing, repo and collateral management. The paper takes stock of existing industry initiatives, institutional DLT networks and live market applications, while considering how greater standardisation and harmonisation could help address fragmentation, support the development of scalable and interoperable DLT-based fixed income markets, and maximise the impact of smart contracts.
Drawing on input from ICMA members, including through the ICMA DLT Bonds Working Group and Bond Data Taxonomy Working Group, the paper considers where future harmonisation efforts should be focused. In particular, it explores the role of common smart contract and data standards, the challenges surrounding digital settlement assets and settlement finality, and the need for greater interoperability between DLT platforms and existing market infrastructure.
The paper also considers the role of regulators and the official sector in supporting harmonisation alongside market-led initiatives, and highlights repo and collateral as areas where smart contract-based automation may offer particular potential.
ICMA and Francisco Parente, author of this paper, would like to thank the members of the DLT Bonds Working Group and the BDT Working Group who participated in workshop discussions and provided helpful commentary, drafting suggestions and feedback.
ICMA welcomes feedback from members and the wider industry on the key questions highlighted throughout this paper, which will help inform and guide the future development of DLT-based bond markets.
Feedback can be shared with Francisco Parente and Gabriel Callsen.
