European Investment Bank taps blockchain for Climate Awareness Bond

European Investment Bank Releases Blockchain-Based Digital Bond

The European Investment Bank (EIB) has released a digital bond that is based on blockchain technology and is supported by node infrastructure that is rewarded for being environmentally friendly.

The financial institution issued a statement which detailed the salient features of a “digital native green bond” denominated in Swedish krona. This bond, with a value of 1 billion krona, will be available to institutional investors and will have a fixed rate of 3.638% for a two-year period.

The Luxembourg Stock Exchange Securities Official List is featuring the Climate Awareness Bond as the first blockchain-based bond to be registered and displayed on the Luxembourg Green Exchange.

The recently launched So|bond sustainable blockchain digital bond platform will facilitate the issuance, trading, and settlement of digital bonds, with pro-environmental incentives for its node operators, as Cointelegraph previously reported.

Sobond’s “Proof of Climate Awareness” protocol encourages nodes to reduce the environmental impact of their infrastructure. This is accomplished by providing financial compensation to nodes based on a formula that is correlated to their climate effect, with lower impact ratings leading to greater rewards.

Siemens has issued a digital bond worth $64 million on a public blockchain.

Finaxys, a French-based IT provider, created the protocol, and So|bond is a joint effort between Skandinaviska Enskilda Banken (SEB) and Credit Agricole.

In a statement, EIB Vice President Ricardo Mourinho Felix declared that the inaugural green and krona-denominated bond is designed to use blockchain technology to move towards more sustainable financial systems.

Ben Powell, the head of Sustainable DCM at SEB, stated that the acceptance of blockchain technology has been limited due to the perception of its high energy consumption in recent years. So|bond seeks to reduce the environmental effect of financial infrastructure by utilizing technology which has been frequently criticized for its carbon footprint.

Cointelegraph has contacted the EIB to obtain further information regarding the bond and the potential institutional purchasers.

European Investment Bank Explores Potential of Blockchain-Based Platforms for Digital Bonds

In 2022, the organization collaborated with Goldman Sachs and Société Générale Luxembourg to issue a digital bond worth €100 million (USD 103.7 million) on a private blockchain platform.

For the past three years, the European Investment Bank has been looking into the potential of blockchain-based platforms for digital bonds. In April 2021, news of a possible digital bond issued by the EIB on the Ethereum network caused Ether (ETH) to reach a record high.

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