Crédit Agricole CIB and SEB launch a sustainable and open digital bond platform built on blockchain technology
Crédit Agricole CIB and SEB jointly launch so|bond, a “sustainable and open[1]” platform for digital bonds built on blockchain technology. Through the platform, issuers in the capital markets will be able to issue digital bonds on a blockchain network, with the aim of improving efficiency and enabling real-time data synchronization across participants. The blockchain network uses a validation protocol, Proof of Climate awareness, which encourages participants to minimize their environmental footprint.
Blockchain technology has the potential to modernize and digitize the banking and finance sectors through decentralized and efficient infrastructure. The So|bond platform will enable issuers to raise capital and manage securities through smart contracts, programs that automatically execute, control or document events and actions according to the terms of the contract. The platform’s open, transparent and secure model also fosters trust between market participants and allows for further innovations such as using a future digital central bank currency.
New Proof of Climate Awareness protocol encourages lower environmental impact throughout the entire life cycle of the infrastructure
One of the main barriers to the widespread use of blockchain technology is that it is often considered a high energy-intensive solution. Although “Proof of Stake” protocols use significantly less energy than those using “Proof of Work”, there is room for further improvements. The So|bond platform is built on a new type of blockchain validation logic, the Proof of Climate awaReness protocol. It enables an energy consumption comparable to non-blockchain systems and incentivizes participating nodes to continuously improve the environmental footprint of their infrastructure. More specifically, each node will be remunerated for its efforts according to a formula linked to its climate impact evaluated with the Life Cycle Assessment ISO standard: the lower its environmental footprint, the greater the reward.
The platform and blockchain technology have been developed in collaboration with the IT supplier Finaxys. The environmental footprint is measured according to a methodology developed by APL Data Center and used by SGS, a world-leading certification expert. so|bond is the first use of this new blockchain technology operating under the Proof of Climate Awareness protocol in global capital markets.
Romaric Rollet, head of innovation and digital transformation at Crédit Agricole CIB: “Crédit Agricole CIB is proud to contribute to the emerging market of digital assets. The platform’s innovative approach, both to the blockchain infrastructure and to the securities market, is combined with the strong commitment to green and sustainable finance that is at the center of our social project. This is a key achievement, part of the Crédit Agricole CIB Digital Transformation Acceleration plan, and we welcome collaboration to convert innovations into possible market standards that better respond to our clients’ needs in an ever-evolving regulatory environment.”
Anna Sjulander, head of SSA DCM (sovereigns, supranationals and agencies debt capital markets) in SEB: “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. We see this as a great opportunity to learn what the future holds for 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.”
