What is a bond that is payable to whoever holds it, rather than to a named owner?
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2 Answers
A bond that is payable to whoever holds it, rather than to a named owner, is called a bearer bond. This type of bond is not registered in the name of the owner, and the physical possession of the bond itself is the proof of ownership. Bearer bonds are uncommon today due to their potential for misuse in illegal activities like money laundering or tax evasion.
A bond that is payable to whoever holds it, rather than to a named owner is known as a bearer bond. Bearer bonds are unregistered debt securities, meaning the issuer does not keep a record of the owner's identity, making them anonymous. The bearer of the bond can easily transfer and trade it without having to go through any formal registration or ownership transfer process.