With tokenization of traditional assets such as stocks, bonds and real estate a growing industry, there are still some product areas it has yet to touch.
Among them are catastrophe bonds, the specialized insurance products that pay out in the event of a major disaster, such as a hurricane or earthquake. That may be set to change, with plans to bring these onchain as well.
Harneys, a law firm whose specialties include advising on alternative risk-transfer products including cat bonds, and droppRW, a Bahamas-based platform that is helping Saudi Arabia tokenize its economy, plan to issue what they say will be the first catastrophe bonds whose ownership is recorded directly on a blockchain, with a first deal targeted for early 2027.
In many tokenization products, the token itself is a representation of a product that is secured in a traditional, offchain environment like a holding company. While ownership of the token can be transferred quickly, it points to that third party, not the asset. That's not the case for the planned cat bond project.
“The token would not simply point to a bond held somewhere else,” Henry Mander, partner and global head of trusts and private wealth at Harneys, said in an interview. “Under the structure the firms have developed in Bermuda, the investor would hold legal title to the bond.”
That matters because "the investor register, eligibility checks and payment process would sit on the same legally enforceable system, rather than alongside an offchain ownership record,” Faisal Monai, CEO and co-founder of droppRWA, told CoinDesk. The system could reduce reconciliation from days to seconds, provided it receives the necessary regulatory approvals.
Financial firms are already moving beyond tokenizing conventional assets and starting to test blockchain systems for issuance, ownership and settlement. The market for tokenized assets has nearly tripled over the past year to more than $33 billion, according to RWA.xyz. Citi estimates the sector could reach $5.5 trillion by 2030.
Catastrophe bonds are a $65.6 billion market used by insurers, reinsurers and government entities to transfer a portion of their exposure to natural disasters to capital market investors.
The investors receive coupon payments, typically a floating money-market return on the collateral plus a risk spread, but have to pay out if a qualifying event occurs. That attraction is returns uncorrelated to financial markets, economic cycles or political events.
“The issue isn’t whether you can put a catastrophe bond on a blockchain,” said Edwin Mata, CEO and co-founder of tokenization firm Brickken. “It’s whether the blockchain becomes the legal ownership record. If it does, transferring the token transfers legal title. If it doesn’t, you are only moving a digital version of an asset recorded somewhere else.”
Mata said tokenization does not change the catastrophe risk, trigger mechanics, collateral quality or the bond's valuation and does not create liquidity on its own. The real proof, he said, will be a live issuance with institutional participation, a legally final settlement and a secondary market that functions in practice.
The second quarter of 2026 was the largest quarter for issuance in the cat bond market’s history, with $11.3 billion of new issuance across 48 transactions. The Bermuda Stock Exchange carried 93% of global catastrophe-bond issuance in 2025 and had $70.5 billion in cat bonds and insurance-linked securities listed at the end of the second quarter of 2026.
Also under consideration is a way of reducing the minimum investment. Rather than directly buying cat bond notes, which typically carry minimum denominations of $250,000 or more, investors would buy a beneficial interest in a vehicle that holds the bond and passes income to them — along the lines of some more-established tokenization projects. In that structure, the minimum investment could fall to $5,000.
The project is still pending applicable regulatory requirements and approvals. Any platform administrator role would be subject to licensing under Bermuda’s Digital Asset Business Act 2018.
If, as planned, the first issuance proceeds in 2027, it will test whether the legal, settlement and audit infrastructure underpinning the catastrophe bond market can operate onchain.