Capital markets News

EIB planning blockchain bond on Credit Agricole/SEB platform

credit agricole

The European Investment Bank (EIB) has already conducted three blockchain issuances on different platforms. Now it’s planning a digital bond on the new network recently launched by Credit Agricole CIB and SEB, so|bond, as first reported by Global Capital.

The banks described so|bond as sustainable and open. It’s not particularly targeting green bonds, but the blockchain aims to be more sustainable. Node operators are incentivized to minimize their environmental footprint. 

The EIB was the first to issue digital bonds on platforms launched by Societe Generale ForgeGoldman Sachs and HSBC.

Last month, Xavier Leroy, the EIB funding officer responsible for the blockchain issuances, mentioned that another two bonds were planned this year. The EIB aims to be at the forefront of helping innovations to get established as it did with green bonds.

Leroy has previously outlined the benefits of digital bond issuance as safer, cheaper, programmable, and lower barriers to entry for smaller issuers. However, he doesn’t believe we’re there yet because digital issuances are in the early stages. He sees a key impediment to tokenization as the lack of conventional custodians that support digital assets because institutional investors want to use their conventional custodians.

Circling back to bond issuances, we wouldn’t be shocked if a future one for the so|bond platform might be with the Hong Kong Monetary Authority (HKMA). Its first digital green bond was issued with the Goldman Sachs DAP platform, but the syndication additionally included the Bank of China (HK), Credit Agricole CIB and HSBC. There are at least two other digital bond platforms amongst the syndicate.

Meanwhile, Credit Agricole Italy is working on a tokenized bond test with startup BlockInvest as part of Bank of Italy trials.

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