European Investment Bank (EIB) Taps Blockchain Technology for Bond Sales

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The European Investment Bank (EIB) is looking to adopt distributed ledger technology (DLT) for the sales of its digital bonds. The financial institution is collaborating with several top banks, including Goldman Sachs, Banco Santander SA and Societe Generale AG to make the project a huge success, according to a Bloomberg report on April 13, 2021.

EIB Eyes Blockchain Tech for Bond Sales

In another exciting development for the blockchain space, the European Investment Bank (EIB), a publicly owned international financial institution established in 1958, is looking to adopt blockchain technology, the solid foundation behind bitcoin (BTC) and altcoins for digital bond sales.

For the uninitiated, the EIB is the EU’s investment bank and part of its major objectives is to function as a trusted adviser and financier of the European Commission in its mission to tackle issues such as climate change and others.

Per sources close to the matter, the euro-pegged digital bond would be registered and settled on the blockchain. In a bid to make the initiative as frictionless as possible, the EIB is collaborating with other leading financial institutions including Goldman Sachs, Banco Santander SA and Societe Generale AG.

Though the EIB is yet to release the entire details of its blockchain-powered bond sales, anonymous sources close to the bank have hinted that investor meetings for the inaugural bond sale will begin on April 15, 2021, and it’s expected to continue for several weeks.

Financial Institutions Actively Adopting DLT

Though nascent, blockchain technology, which has been criticized in the past by some tech experts, is increasingly gaining traction in numerous sectors of the global economy, from arts and entertainment to banking and trade finance among others.

As reported by BTCManager last November, China Construction Bank, the third-largest bank in the world by market capitalization, tokenized and sold $3 billion worth of bonds on the blockchain. 

In December 2020, UnionBank joined forces with Standard Chartered bank to launch a blockchain-based bond issuance platform that was used to issue more than $190 million worth of digital bonds. 

At the time, the lenders made it clear that they chose to issue the bonds on the blockchain rather than use traditional methods, as the former eliminates the need for third parties, while also lowering the barrier to entry for retail investors.

Other lenders that are actively exploring blockchain technology include the Bank of Korea, JPMorgan, and National Bank of Canada, among others.

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