European traditional financial banks join forces for a blockchain-based trading platform for digital bonds
The major European banks SEB and Crédit Agricole have launched so|bond, a new blockchain-based platform for issuing digital bonds in the traditional financial sector.
The new platform, said to be a “sustainable and open” blockchain, aims to improve efficiency and enable real-time data synchronization across participants, a joint announcement by the two banks said on Monday.
Instead of relying on traditional consensus mechanisms such as Proof-of-Stake (PoS) or Proof-of-Work (PoW), the new platform uses a validation method that the banks have dubbed “Proof of Climate Awareness.”
According to the banks, the method will motivate participants to minimize their so-called climate footprint, but it is still unknown how secure or decentralized it is.
The So|bond platform enables issuers to raise capital and manage securities through smart contracts, which automatically execute, control or document events and actions according to the terms of the contract.
The intention is that the system’s open and transparent nature will promote trust between market players and allow further innovations.
Commenting on the launch, Anna Sjulander, head of SSA DCM (sovereigns, supranationals and agencies debt capital markets) at SEB, said the new platform will allow the banks to study what digital assets will mean for traditional financial firms.
“The launch of the digital bond platform is an important step for SEB, and for issuers and investors joining the platform, and will allow us to gain insight into what the innovative space of digital assets means for the financial industry,” she said, adding to that the goal is to expand use cases in the future:
“We see this as a great opportunity to learn what the future holds in terms of transparency, faster processing and operational simplifications, and will use a bond as the first stepping stone before expanding the use of the platform to other asset classes.”
The platform and blockchain technology have been developed in collaboration with IT supplier Finaxys, while the environmental footprint is measured according to a methodology developed by APL Data Center and used by SGS, a world-leading certification company.
So|bond is the first use of this new technology operating under the Proof of Climate Awareness protocol in global capital markets.
