BNP Paribas issues tokenized bonds for EDF on the public blockchain – Ledger Insights

Last week, BNP Paribas (BNPP) structured and tokenized a project financing bond on the public Ethereum blockchain. The proceeds were used to fund solar energy projects through EDF ENR, which helps companies and individuals install solar panels.

The French bank, Europe’s second largest, mentioned an important advantage of tokenisation as that it enables smaller renewable energy projects to raise funds, and it allows investments in smaller amounts. In addition, with the amount of greenwashing going on, blockchain adds transparency.

Perhaps because the bond investor was BNP Paribas Asset Management, it was not necessary to keep the bond on the blockchain, and within 48 hours it was converted into a traditional bond. On the other hand, we believe that others who have issued public blockchain bonds, such as Societe Generale Forge, Santander and the European Investment Bank, have kept the asset as tokens.

“This innovation creates further bridges between issuers and investors, bringing a unique end-to-end ESG financing solution to our customers – from origination to distribution, to custody,” said Arnaud Boyer, Chief Digital Officer of BNP Paribas Corporate and Institutional Banking (CIB).

Several parts of the bank were involved in the process. BNP Paribas CIB was involved in the issue that used the group’s tokenization platform AssetFoundry. BNP Paribas Securities Services managed the custody aspects and BNP Paribas Asset Management bought the bond.

In addition, EDF’s web3 subsidiary Exaion carried out the public blockchain tokenisation to ensure that it used low – carbon energy. Given that the Ethereum network uses energy-intensive evidence at work, this made us scratch our heads. Maybe it used carbon offsets. Ethereum switches to proof of effort, so it is conceivable that the transaction was on a test network for proof of effort. Or it could have been done on an Ethereum side chain or Layer 2 solution. We have contacted Exaion for clarification.

In the meantime, BNP Paribas has been involved in many blockchain initiatives in recent years. For bonds, a participant in Marketnode, the Singapore Digital Assets platform co-founded by the Singapore Exchange (SGX). BNPP Securities Services first tried custody of Ethereum in 2020, in collaboration with the custodian technology company Curv, which PayPal later bought.