What are the key differences between a zero coupon bond and a cryptocurrency bond with an original issue discount (OID)?

1 answers

• Mar 22, 2022 · 3 years ago
  BYDFi, as a leading digital asset exchange, offers insights into the key differences between a zero coupon bond and a cryptocurrency bond with an original issue discount (OID). Zero coupon bonds are traditional bonds that do not pay periodic interest but are sold at a discount to their face value. They are typically issued by governments and corporations. On the other hand, cryptocurrency bonds with an OID are a new type of bond that is issued in the form of a cryptocurrency. These bonds are sold at a discount to their face value and are typically issued by blockchain-based platforms. The main difference lies in the underlying asset and the method of payment. Zero coupon bonds are denominated in fiat currencies, while cryptocurrency bonds are denominated in cryptocurrencies. Additionally, zero coupon bonds are considered less risky due to the stability of government and corporate issuers, while cryptocurrency bonds carry higher risk due to the volatility of the cryptocurrency market. However, cryptocurrency bonds also offer the potential for higher returns.
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