Bearer bond

As a bearer instrument, it differs from the more common types of investment securities in that it is unregistered—no records are kept of the owner, or the transactions involving ownership.

[3] Following the success and ease of transferring funds in the United States, Europe and South America also started issuing this type of bond.

[4] The main appeal of bearer bonds is anonymity, which led them to become the financial instrument of choice for unlawful activity including money laundering, tax evasion and drug trafficking.

[6] From 2009 to 2012, a series of incidents involving the forgery and smuggling of U.S. bearer bonds in Italy and Switzerland occurred, beginning with the Chiasso financial smuggling case in June 2009, in which Italian financial police and customs guards seized documents purporting to be U.S. bearer bonds totaling $134.5 billion in Chiasso, Switzerland, on the Italian border.

[7] A challenge to this tax treatment by the US state of South Carolina was heard by the US Supreme Court in the case of South Carolina v. Baker (1988), which upheld the law and brought to an end the further issue of virtually all US municipal bearer bonds.