The European Investment Bank (EIB) has valued its first-ever digital bond at 50 million pounds.
When assessing the value of the digital bond, the bank used a combination of private and public blockchains managed and accessible through the HSBC Orion tokenization platform. This transaction fully complies with the Luxembourg legal framework, which was adopted to ensure the issuance, transfer, and storage of dematerialized securities in the infrastructure of distributed ledger technology (DLT).
An encrypted private blockchain represents the legal ownership of digital bonds. Also, this blockchain provides an operational basis for managing a floating-rate instrument and its lifecycle events.
The public blockchain is used for informational purposes, the goal of its existence is to ensure maximum transparency for investors and the market in everything related to the ownership of digital bonds on an anonymous basis.
Dematerialized digital bonds are held in digital securities accounts at HSBC Orion. BNP Paribas Securities Services division in Luxembourg, RBC, and HSBC are data custodians of existing clients who invest in bonds.
The architecture distributed between BNP Paribas, HSBC, and RBC Capital Markets provides that HSBC is the main custodian of accounts registering transactions in digital bonds.
EIB Vice President Ricardo Mourinho Felix stated that there is currently a need for further investment in the development and modernization of the financial sector. He also noted that the introduction of a new financial instrument will contribute to attracting additional capital. The bank uses this capital for the development of projects, the implementation of which is carried out on a global scale.
In 2022, the EIB issued two-year bonds worth 100 million euros using public blockchain technology in tandem with Goldman Sachs, Santander, and Societe Generale.
As we have reported earlier, European Investment Bank announced collaboration with Europol.