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European Investment Bank to Leverage Blockchain Technology for Bond Sale

European Investment Bank to Leverage Blockchain Technology for Bond Sale

The European Investment Bank (EIB) plans to utilize blockchain technology for selling bonds. The investment arm of the EU (European Union) intends to streamline bond issuance employing DLT. Moreover, the EIB is the EU’s investment bank. A part of its primary objectives is to operate as a trusted adviser and financier of the European Commission to solve climate change and others.

According to the sources, the euro-pegged digital bond would be registered and settled on the blockchain. To make the initiative as smooth as possible, the EIB has partnered with other well-known financial organizations. It involves Goldman Sachs, Banco Santander SA and Societe Generale AG. However, the EIB is yet to release the complete details of its blockchain-powered bond sales. But, anonymous sources familiar to the bank have suggested that investor meetings for the inaugural bond sale will start on April 15, 2021, and may go on for multiple weeks. 

Development of Digital Euro may take almost 4 Years

As the EIB plans to continue its plans to introduce a blockchain-enabled bond, ECB (European Central Bank) President Christine Lagarde has opined that ECB will decide to launch the CBDC by the middle of this year. Nonetheless, she illustrated that after determining whether or not to go ahead with a digital Euro issuance, the actual extension of the CBDC would take at least another four years. Europe, accordingly, attempts to be a vital player in the blockchain and crypto space. 

Furthermore, global banks are frequently trialing the power of blockchain in bond issuance. For instance, Thailand’s Central Bank introduced a blockchain-based platform designated for government bond savings issuance in September 2020. It was to enhance investor’s purchasing experience, improve operational efficiency, and decrease the overall cost of operations. Moreover, in December, the Union Bank of the Philippines and Standard Chartered (StanChart) built a proof of concept needed in the issuance of a blockchain-based retail bond. The tokenized retail bond worth $187 million (9 billion pesos) was reflected on the blockchain platform. It included a three and 5.25-year dual issuance.

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