EIB Launches First £50 Million Digital Sterling Bond On Blockchain

Key Points:

• The European Investment Bank (EIB) said on Tuesday that it has partnered with BNP Paribas, HSBC, and RBC Capital Markets to introduce its first digital bond denominated in sterling on a private blockchain.
• A public blockchain mirror record would boost transparency on an anonymized version of the 50 million pounds floating-rate bond, which was recorded on a private blockchain.

According to Reuters, the European Investment Bank (EIB) said it had partnered with BNP Paribas, HSBC and RBC Capital Markets to launch the first sterling-denominated digital bond issued on the private blockchain.

The £50 million ($61.6 million) floating-rate bond is registered on a private chain, while the mirror record on the public chain will improve transparency on an anonymous basis, the EIB said.

The bank’s tokenization platform, HSBC Orion, provides access to the digital bond. The bank listed the advantages as cost savings, increased effectiveness, and real-time data synchronization. The architecture of the system is distributed by HSBC, BNP Paribas, and RBC Capital Markets.

The transaction came after earlier EIB sales of digital bonds denominated in euros.

The sales, according to EIB Vice-President Ricardo Mourinho Felix, reflected more financial industry innovation:

“The time has come for further innovation in the financial sector, and we are pleased to issue the first digital bond in pound sterling on a private and public blockchain with the support of our counterparts. This new financial tool will provide additional capital flow that the EIB will invest in projects with global impact.”

The EIB has already used a blockchain to issue digital bonds. The bank used blockchain technology to issue a $100 million, two-year bond in April 2021. In collaboration with Banque de France, the issue was conducted. In particular, it released $121 million in Ethereum-powered digital notes.

The bank unveiled Project Venus, the first digital bond on a private blockchain denominated in euros, in the fourth quarter of 2022. Of course, the EIB is eager to use technology, as are other reputable financial organizations.

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