The European Investment Bank (EIB) has set a new milestone by issuing its first-ever digital green bond.
This groundbreaking move has been made possible through a blockchain-based platform, engineered by two banking giants, SEB and Credit Agricole.
EIB’s digital green bond serves a critical purpose, embodying a significant step forward in leveraging technology to combat climate change. The move aims to facilitate the lending to climate-related projects, making the process more efficient, secure, and transparent through digitisation.
The EIB is a non-profit banking institution backed by the member states of the European Union. With a strong commitment to fostering European integration and social cohesion, it directs its financing towards sustainable projects that contribute to green growth, infrastructure development, innovation, and SMEs. The bank has long been associated with driving forward climate-conscious initiatives.
The blockchain platform used for the issuance, named ‘so|bond’, is a sophisticated digital bonds issuance platform developed jointly by SEB and Credit Agricole. Its launch in April marked a significant step in the digital transformation of the financial services industry.
The Climate Awareness Bond, valued at SEK1bn (US$92.7m), holds the distinct honour of being the first bond issued on this blockchain platform. This digital bond aims to bridge the gap between green finance and the digital world, providing an efficient mechanism for raising and managing climate-related project finance.
In a broader context, the so|bond platform, besides facilitating digital bonds issuance, also champions environmental sustainability. It boasts a unique validation logic that encourages low energy consumption. Additionally, it features a rewards system designed to incentivise affiliated banks to work towards reducing their carbon footprints.
The EIB’s move to utilise the so|bond platform for its first digital green bond is a testament to the increasing importance of FinTech and blockchain in the global finance ecosystem. Not only does it illustrate the potential of these technologies to disrupt traditional finance, but it also underscores the crucial role they can play in promoting sustainable finance and addressing climate change.
EIB representatives were unavailable for comment at the time of publishing this article.
Copyright © 2023 RegTech Analyst
Copyright © 2018 RegTech Analyst