Can Smart Contracts Facilitate Fractional Ownership of Corporate Bonds for Smaller Investors?

Yes, smart contracts are highly effective at facilitating fractional ownership. A corporate bond can be tokenized on a blockchain, and this token can be divided into much smaller units than a traditional bond.

The smart contract manages the ownership records and can automatically distribute the pro-rata share of coupon payments to each fractional owner's digital wallet. This process dramatically lowers the administrative costs associated with managing many small investors, making it economically viable to open up bond markets to a wider audience with less capital.