The European Investment Bank uses a private blockchain to settle the “first ever” €100 million bond
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(Kitco News) – Crypto winters are for building, and that includes integrating blockchain technology into the broader financial ecosystem as the benefits the technology offers become more apparent to the legacy system.
The European Investment Bank (EIB) is the latest entity to jump on the blockchain wave with the issuance of the first ever €100 million euro-denominated digital bond on a private blockchain.
According to the press release distributed by the EIB, the bank launched Project Venus in collaboration with Goldman Sachs Bank Europe, Santander and Société Générale with the aim of issuing a euro-denominated digital native bond using private blockchain technology.
“The two-year Eurobonds of €100 million were issued, registered and settled using private blockchain-based technology, and represent the first issuance on Goldman Sachs’ tokenization platform – GS DAPTM,” the release said.
Banque de France and Banque centrale du Luxembourg also participated in the project and provided a digital representation of euro central bank money in the form of tokens. Société Générale Security Securities Services (SGSS Luxembourg) acted as custodian for the financial instrument while Goldman Sachs Bank Europe SE acted as account manager.
The bond has a coupon rate of 2.57% per annum with a maturity date of 29 November 2024 and is governed by Luxembourg law.
According to the EIB, this transaction paves the way for the future of on-chain derivative solutions, using the first interest rate swap hedge represented through the industry-developed Common Domain Model (CDM).
The new digital bond is also the first “syndicated agreement” to offer same-day settlement and is “the first cross-chain Delivery vs Payment (DVP) settlement using an experimental CBDC token.”
This EIB lawsuit follows the successful issuance of the first digital Eurobond on a public blockchain in April last year.
“Blockchain has the potential to disrupt a wide range of sectors. It plays a central role in the success of Europe’s green and digital transitions, strengthening our technological sovereignty, said EIB Vice President Ricardo Mourinho Félix. “Innovation is part of the EIB’s identity, and Issuing this all-digital bond is another important step in helping to develop a fully digital ecosystem.”
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