European Investment Bank to Harness Blockchain Technology for Bond Sale

The European Investment Bank (EIB) intends to deploy blockchain technology for the sale of bonds. The investment arm of the European Union (EU) seeks to streamline bond issuance using digital-ledger technology. 

Boosting innovations in debt capital markets

According to the announcement:

“The European Union’s investment arm hired Goldman Sachs Group Inc., Banco Santander SA and Societe Generale AG to explore a so-called digital bond in euros, which would be registered and settled using blockchain.”

The European Investment Bank has prompted various innovations in the region's debt capital market. For instance, it set the ball rolling in the issuance of green and sustainability bonds. Global banks are continuously testing the power of blockchain in bond issuance. 

For example, Thailand’s Central Bank launched a blockchain-powered platform meant for government bond savings issuance in September 2020. It was to improve investor’s buying experience, enhance operational efficiency, and reduce the overall cost of operations.

Later on, in December, the UnionBank of the Philippines and Standard Chartered (StanChart) created a proof of concept required in the issuance of a blockchain-powered retail bond. The tokenized retail bond worth $187 million (9 billion pesos) was mirrored on the blockchain platform and involved a three and 5.25-year dual issuance.

The issuance of a digital euro

As the EIB continues with its plans to roll out a blockchain-enabled bond, European Central Bank (ECB) President Christine Lagarde recently said that a decision on whether or not to launch a central bank digital currency (CBDC) will be made by the middle of this year.

Nevertheless, she pointed out that after deciding whether or not to go forward with a digital Euro issuance, the actual development of the central bank digital currency (CBDC) will take at least another four years.

Europe, therefore, seeks to be a significant player in the blockchain/crypto space.