Law firm Harneys and platform droppRWA have announced plans to issue catastrophe bonds (cat bonds) with ownership rights recorded on the blockchain. The partners intend to conduct the first transaction with such instruments as early as the beginning of 2027.
What are cat bonds and why this matters
Catastrophe bonds are an instrument used by insurance companies and government agencies to redistribute the risks of natural disasters. An investor receives coupon income, but if a stipulated event occurs—a hurricane, earthquake, or flood—they may lose part or all of their invested capital. The volume of this market is currently estimated at approximately $65.6 billion.
The key question, according to Edwin Mata, CEO and co-founder of Brickken, is whether blockchain will become a legally significant registry of ownership rather than merely a digital reflection of the asset. Tokenization itself does not change the catastrophe risk assessment, the mechanics of triggers, or the quality of collateral—it is only an infrastructure layer.
Technology versus bureaucracy
Co-founder of droppRWA Faisal Monaie emphasizes that the investor registry, admission checks, and settlements can be combined into a single legally enforceable system. Upon receiving the necessary regulatory approvals, data reconciliation could shrink from days to seconds—this fundamentally changes operational efficiency.
Separately, the issue of lowering the entry threshold is being addressed. Instead of directly purchasing notes with a typical minimum denomination of $250,000, investors will be offered a beneficial interest in a structure that distributes income among multiple holders. In this case, the minimum investment could drop to $5,000, opening the market to retail participants.
Figures and context
In the second quarter of 2026, the volume of catastrophe bond issuance reached $11.3 billion across 48 deals. The Bermuda Stock Exchange accounted for 93% of global placement in 2025—it lists cat bonds and insurance securities worth $70.5 billion. Meanwhile, the overall tokenized assets market has nearly tripled over the past year, exceeding $38.5 billion.
It is worth recalling that the International Monetary Fund has again warned about the risks of tokenization. According to the regulator, the technology could reshape the architecture of the global financial system, but without unified standards it risks amplifying market fragmentation and systemic risks.
My view: a pilot issuance of cat bonds on the blockchain is a logical next step after the boom in tokenization of government debt and funds. However, success here will be determined not by technology but by the readiness of regulators to recognize the distributed ledger as the official source of truth. If that happens, the catastrophe bond market could become one of the fastest-growing segments of RWA.