Law firm Harneys and tokenization platform droppRWA plan to issue catastrophe bonds with ownership rights recorded directly on a blockchain in early 2027, CoinDesk reports. The Bermuda project matters because it would make the blockchain the legal ownership record and could lower the minimum investment to $5,000 from the $250,000 face value common for traditional catastrophe bonds.

Catastrophe bonds, also known as cat bonds, allow insurers, reinsurers and government entities to transfer some of the risk from large natural disasters to investors. Investors receive coupon payments but may be required to fund payouts to insurers if a specified catastrophe occurs.

Proposed onchain ownership structure

Many tokenized assets use a token to represent an asset legally held in a separate offchain structure. Harneys and droppRWA instead want the token itself to be linked directly to legal ownership of the catastrophe bond.

“The token would not simply point to a bond held somewhere else. Under the structure the firms have developed in Bermuda, the investor would hold legal title to the bond,” said Henry Mander, a Harneys partner.

droppRWA CEO Faisal Monay said the register of owners, investor verification and payout process would also operate within a legally enforceable system. According to Monay, the proposed structure could reduce reconciliation times from several days to a few seconds.

The project requires relevant regulatory approvals. Its platform administrator must also obtain a license under the Bermuda Digital Asset Business Act 2018.

The structure could reduce the amount required to invest in cat bonds. Traditional issues often have face values starting at $250,000, but investors could instead receive beneficial interests in a structure that owns the bond, potentially lowering the minimum contribution to $5,000.

Edwin Mata, CEO and co-founder of Brickken, said the main challenge would be the project’s legal and financial implementation rather than tokenization itself.

“The issue isn’t whether you can put a catastrophe bond on a blockchain. It’s whether the blockchain becomes the legal ownership record. If it does, transferring the token transfers legal title.”

Tokenized assets and catastrophe-bond markets

The tokenized-assets market had surpassed $38 billion at the time of writing, according to data from RWA.xyz. Citibank projects that the tokenized-securities market could reach $5.5 trillion by 2030.

The catastrophe-bond market is estimated at $65.6 billion. The second quarter of 2026 set a record, with $11.3 billion of bonds issued across 48 deals.

Consensys CEO and founder Joseph Lubin has said the global economy is moving toward full tokenization and that Ethereum has structural advantages in developing the sector. New York Life Investment Management has described the next stage of tokenization as the creation of personalized investment portfolios for millions of clients.

Source: Incrypted