Conducting a Deep Dive of the Global Digital Bond Market – Diagnostic; Risk Assessment and Market Scoping A. BACKGROUND AND OBJECTIVESIFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries; using our capital; expertise; and influence to create markets and opportunities in developing countries. In fiscal year 2024; IFC committed a record $56 billion to private companies and financial institutions in developing countries; leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. IFC invests in private sector projects that are financially and economically viable and have a substantial development impact. The Financial Institutions Group (FIG) is the largest of IFC’s four industry departments. FIG engages with private sector financial entities and relevant players in the financial ecosystem through its investment and advisory services to offer joint solutions that enable them to play a constructive role in promoting economic growth and financial inclusion. Under its Capital Markets/Upstream&Advisory umbrella; FIG initiated an initiative focused on understanding the market dynamics and potential for digital bond investments as well as legal considerations regarding digital bond investments relevant for IFC – with a specific lens on Asia. Well-functioning capital markets are essential for providing stable funding during normal times and acting as a buffer during crises. However; the development of bond markets faces significant challenges; including high costs for issuers; limited investor participation; and a lack of transparency. These issues are particularly pronounced in less developed and shallow capital markets; where bond issuances often suffer from low trading liquidity and unreliable reporting. Digitally tokenized bonds (DTBs); leveraging blockchain technology; offer a transformative solution to these challenges. DTBs convert traditional bonds into digital tokens that can be transferred; owned; and stored on a distributed ledger technology (DLT) or blockchain. This technology eliminates the need for central intermediaries; enhances transparency; and allows for real-time transaction tracking. DTBs can also be offered to a broader range of investors; including those with lower investment thresholds; through fractionalized ownership. The potential benefits of DTBs are substantial. They can make capital markets more accessible by reducing cost barriers and lowering investment thresholds; streamline the bond issuance process; improve trading liquidity through a global platform; and enhance market transparency with real-time; verified records. The objectives of the proposed upstream project are to perform comprehensive market and regulatory diagnostics for the issuance of Digitally Tokenized Bonds (DTBs); engage with key internal and external stakeholders to assess IFC’s institutional readiness to participate in the DTB market as an investor or bond buyer; and initiate subsequent investments in DTBs through pilot transactions; initially in the East Asia and Pacific (EAP) region; with plans for expansion to other regions. IFC seeks to engage a consulting firm that will support IFC to understand the product and the market better and evaluate the opportunities and risks/challenges in digital bond markets.The objectives of this assignment will be two-fold:1. - Diagnostic and risk assessment2. - Market scoping For this purpose; IFC would hire a consulting firm