Law firm Harneys and platform droppRWA have announced an ambitious pilot project to issue catastrophe bonds (cat bonds) with a blockchain-based ownership registry. The partners intend to conduct the first transaction as early as early 2027. This is a landmark step for a market estimated at approximately $65.6 billion, which has so far remained on the sidelines of the real-world asset tokenization boom.
Catastrophe bonds are an instrument that insurers and governments use to redistribute natural disaster risks (hurricanes, earthquakes) to investors. The holder receives income until a specified trigger event occurs. The essence of the pilot is not merely to digitize an asset, but to make blockchain a legally significant registry of ownership, rather than an auxiliary record.
As Edwin Mata, CEO and co-founder of Brickken, rightly notes, tokenization itself does not change the fundamental parameters of a transaction: risk assessment, trigger mechanics, or collateral quality. However, the key question is whether a distributed ledger can become a full-fledged legal foundation. droppRWA co-founder Faisal Monai sees enormous potential in this: combining an investor registry, verification procedures, and payments into a single legally enforceable system. Subject to obtaining the necessary regulatory approvals, this could reduce data reconciliation time from days to seconds.
Democratizing access and market growth
Separately, the issue of lowering the entry threshold is being addressed. The traditional minimum denomination of a cat bond is from $250,000, making the instrument accessible only to institutional investors. The new structure involves issuing beneficial interests in a fund that distributes income among multiple holders. In this format, the minimum investment could drop to $5,000, opening the market to a wider range of investors.
Interest in the instrument is confirmed by figures: in the second quarter of 2026, cat bond issuance volume reached $11.3 billion across 48 deals. The Bermuda Stock Exchange remains the dominant venue, accounting for 93% of global issuance in 2025, with a total volume of listed securities at $70.5 billion. Meanwhile, the overall tokenized assets market nearly tripled over the year, exceeding $38.5 billion.
This pilot is a logical stage in the evolution of RWA. However, one should not forget the recent warnings from the IMF: without unified standards, tokenization could intensify market fragmentation and create systemic risks. The success of the Harneys and droppRWA project will largely depend on whether they can offer a solution that satisfies regulators, not just technology enthusiasts.