2021 marks another great year for blockchain tech as now even renowned financial institutions are accommodating the tech. On April 27, 2021, the European Investment Bank issued its first digital bond on a public blockchain. Safe to say that the decision stirred the entire blockchain community.
In collaboration with Societe Generale, Goldman Sachs, and Santander, the distributed ledger technology was deployed for the settlement and registration of digital bonds. The project is stated to be hand-picked by Banque de France to become a part of its CBDC (Central Bank Digital Currency) circle.
The institution openly acknowledged the upcoming demand for decentralization and digitization in the banking sector. Thus, the issuance intends to reduce the fixed and intermediary expenses while facilitating transparency throughout the process. Plus, the modification will also trigger quick settlements and better trading flow.
Here is a brief overview of the details regarding the bond issue:
- Issue Amt.: 100M Euros
- Pricing Day: 27/04/2021
- Settlement Day: 28/04/2021
- Maturity Day: 28/04/2023
- Coupon:000% yearly
- Reoffer Yield: -0.601%
- Reoffer Price:213%
- Law Compliance: French
- Lead Managers: Santander, Societe Generale, and Goldman Sachs
- Fiscal & Settlement Agent, Platform Manager, and Registrar: Societe Generale
- Legal Advisors: Allen & Overy LLP and Linklaters LLP
- Blockchain Network: ETH Public Blockchain
What do the experts think of the decision?
Let us take a look at what the involved parties had to say regarding the move:
- Mourinho Félix (the VP of EIB) stated that the decision came naturally since EIB goes out of its way to support innovative projects.
- Bertrand de Mazières (EIB’s Director-General) said that the decision would be the initial step towards blockchain’s use for issuing financial securities.
- Hervé Ekué (Allen & Overy’s Capital Market Partner) also expressed his joy to witness the milestone being achieved.
- José M. Linares (Santander Corp’s Global Head) stated that working with EIB was a delight, and he is looking forward to the upcoming innovations as well.
- Michael Voisin (Linklaters’ Capital Market Partner) deems the move to be one of its kind, and it will address novel issues in the financial market.
Blockchain tech is cruising right now, and the European Investment Bank’s decision to issue a digital bond on a public blockchain is the biggest testament to the statement right now. What changes will that bring to the industry? Only time will tell, but it certainly clears blockchain’s path towards mainstream mass adoption.