Catastrophe bonds may be among the next products to join the tokenization wave as Harneys and droppRWA plan to issue what they say will be the first cat bonds with ownership recorded directly on a blockchain, targeting early 2027 for their inaugural deal.

Market Context

The broader tokenized asset market 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. Meanwhile, catastrophe bonds—a $65.6 billion market used by insurers, reinsurers and government entities to transfer exposure to natural disasters—remain largely untouched by tokenization efforts that have already moved stocks, bonds and real estate onchain.

Analysis

The proposed structure differs from many existing tokenization projects in a critical way: the blockchain would serve as the legally enforceable ownership record rather than simply representing an asset held elsewhere. "Under the structure the firms have developed in Bermuda, the investor would hold legal title to the bond," said Henry Mander, partner and global head of trusts and private wealth at Harneys.

Faisal Monai, CEO and co-founder of droppRWA, told CoinDesk that the system could reduce reconciliation from days to seconds by having "the investor register, eligibility checks and payment process sit on the same legally enforceable system, rather than alongside an offchain ownership record."

The project also envisions lowering the typical minimum investment. Rather than directly buying cat bond notes with 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—a structure similar to some established tokenization projects. In that model, the minimum could fall to $5,000.

Edwin Mata, CEO and co-founder of Brickken, noted that tokenization does not change catastrophe risk, trigger mechanics, collateral quality or valuation—but the real test will be a live issuance with institutional participation, legally final settlement and a functioning secondary market. "The issue isn't whether you can put a catastrophe bond on a blockchain," Mata said. "It's whether the blockchain becomes the legal ownership record."

Key Numbers

- $65.6 billion: total size of the catastrophe bond market

- $33 billion+: current tokenized asset market size, nearly tripled over past year per RWA.xyz

- $5.5 trillion: Citi's 2030 projection for tokenization sector

- $11.3 billion: Q2 2026 cat bond issuance across 48 transactions—largest quarter in history

- 93%: share of global catastrophe-bond issuance carried by Bermuda Stock Exchange in 2025

- $70.5 billion: cat bonds and insurance-linked securities listed on BSX at end of Q2 2026

- 38%: estimated percentage of natural disaster costs covered by insurance despite potential $450B+ in damages this year

What to Watch

Regulatory approvals remain a key hurdle. Any platform administrator role would be subject to licensing under Bermuda's Digital Asset Business Act 2018. The first test issuance, if it proceeds as planned in early 2027, will demonstrate whether the legal, settlement and audit infrastructure underpinning the catastrophe bond market can operate onchain with institutional participation.