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(Kitco News) - The integration of blockchain technology into the global financial system continues to move forward with the creation of a blockchain-based platform for digital bonds by several of the largest financial institutions in Europe.
According to a Monday press release, Crédit Agricole CIB, the corporate and investment banking arm of Credit Agricole Group, has partnered with Swedish bank SEB to develop “so|bond,” a “sustainable and open platform for digital bonds built on blockchain technology.”
The new platform is designed to enable issuers in capital markets to issue digital bonds directly onto a blockchain network, helping to improve efficiency and enable real-time data synchronization across participants.
So|bond utilizes smart contracts to enable issuers to raise capital and manage securities in an open, transparent, and secure model. The underlying blockchain network uses a “Proof of Climate awaReness” consensus mechanism to help participants minimize their environmental impact.
“The Proof of Climate awaReness protocol incentivises lower environmental impact across the life cycle of the infrastructure, addressing one of the main barriers to the widespread adoption of blockchain technology, its energy consumption,” the release said. “The protocol enables energy consumption comparable to non-blockchain systems and incentivizes participating nodes to continually improve the environmental footprint of their infrastructures.”
Proof of Climate awaReness model. Source: Disruption Banking
IT provider Finaxys collaborated on the development of the new solution. So|bond is the first use case of this new blockchain technology operating under the Proof of Climate awaReness protocol in global capital markets, providing Credit Agricole CIB with a chance to lead the way when it comes to offering sustainable finance solutions.
“The platform’s innovative approach, both to the blockchain infrastructure and to the securities market, is coupled with the strong commitment to green and sustainable finance that is at the centre of our Societal Project,” said Romaric Rollet, Director of Innovation and Digital Transformation at Crédit Agricole CIB. “This is a key achievement, a part of Crédit Agricole CIB Digital Transformation Acceleration plan, and we welcome collaboration to convert innovations into possible market standards that better respond to our clients’ needs in an evolving regulatory environment.”
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This development from Crédit Agricole CIB and SEB is just the latest in a growing movement of blockchain-based digital bond issuance on a global scale. In February, the government of Hong Kong announced the successful issuance of a tokenized green bond valued at 800 million Hong Kong dollars ($101 million), which was made possible by the Government Green Bond Program (GGBP).
February also saw the launch of the first ever pound sterling-denominated digital bond by the European Investment Bank, while Siemens, Germany’s third-largest publicly traded company by market cap, became one of the country’s first companies to issue a digital bond with its issuance of a one-year maturity 60 million-euro ($64 million) bond on the Polygon network.
