EIB settles a digital bond worth €100 million on a private blockchain.

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On Nov. 29, the European Investment Bank, or EIB, issued a first-ever $100 million digital bond denominated in euros on a platform supported by a private blockchain, with assistance from Goldman Sachs for tokenization.

Both of them serve as the financial instrument’s on-chain custodians, together with Société Générale Luxembourg. The bond has a maturity date of November 29, 2024, a coupon rate of 2.57% annually, and is governed by Luxembourgese law.

The initiative to offer a digital depiction of euro central bank money included participation from the Banque de France and the Banque Centrale du Luxembourg. “The transaction lays the path for future on-chain derivative solutions,” according to the EIB., by using the first interest rate swap hedge represented through the industry-developed common domain model.”

The bond is also “the first cross-chain Delivery vs. Payment (DVP) settlement using an experimental CBDC [Central Bank Digital Currency] token,” according to the release.

The EIB released the first digital euro bond on a public blockchain successfully in April of last year. The two-year €100 million digital bond was sold under the leadership of Goldman Sachs, Banco Santander, and Société Générale. Vice President of the EIB Ricardo Mourinho Félix made the following remarks about today’s innovative digital bond issue on a private blockchain:

Blockchain has the potential to upend a number of industries. It increases our technical sovereignty and is crucial to the success of Europe’s green and digital transformations. The EIB prides itself on innovation, and the issuance of this totally digital bond is another crucial step in the development of a fully digital economy.

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